Building permits

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The total value of building permits declined in April as construction intentions fell in both the residential and non-residential sectors as well as in nine provinces. Contractors took out permits worth $5.6 billion, down 8.4% from March.

While the residential sector experienced only a modest decline, non-residential permit values fell sharply.

The value of non-residential permits decreased 18.9% to just under $2.0 billion, the second biggest decline (in dollars) since 1989. All three components (industrial, commercial and institutional) of this sector lost ground. It was only the second time in the last 12 months that the level fell under the $2-billion mark.

In the residential sector, an increase in the value of multi-family permits only partially offset a decline in single-family permits. Municipalities issued permits worth $3.6 billion, a 1.4% decline.

The only province to show a monthly gain in total permits was Nova Scotia, which recorded increases in both sectors. The largest declines (in dollars) occurred in Alberta and Ontario, due largely to decreases in non-residential intentions.

Housing sector: Increase in multi-family units

The value of permits in the multi-family component surged in April, as the number of units approved by municipalities reached its highest level in 16 months.

Contractors took out multi-family permits worth $1.4 billion, up 4.8% from March, their highest value in five months. Municipalities approved 11,618 units, a marked increase of 20.5% over March and the highest number since December 2005.

On the other hand, the value of single-family permits fell 5.0% to $2.2 billion. A total of 9,170 units were approved, 3.2% fewer than in March.

The number of single-family units authorized has been on a generally downward trend since January 2006. However, the number of multi-family units has rebounded slightly from a downward trend that started in July 2006.

Several factors still favour strong demand for housing, including continued strength in employment, advantageous mortgage rates and attractive financing options, rises in disposable incomes and strong immigration. On the other hand, consumer confidence has slipped recently, while already high new housing prices continued to increase.

Provincially, the strongest growth (in dollars) occurred in Alberta, where the value of residential permits rose 8.4% to $823 million. This level was only 0.6% below the record high reached in July 2006. Alberta recorded strong growth in multi-family permits, but a moderate decline in single-family intentions.

Housing permits also jumped in Nova Scotia in April, where a steep increase in multi-family units offset a moderate decline in single-family permits.

On the other hand, in Ontario, the value of residential permits reached its second lowest level in a year. The province recorded modest percentage declines in the values of both single- and multi-family permits. Quebec also had moderate percentage losses in both housing components.

Saskatchewan and Prince Edward Island experienced the biggest percentage declines in the value of residential permits. In Saskatchewan, steep drops in both housing components followed four consecutive monthly gains.

Non-residential: Widespread declines in all three components

All three components in the non-residential sector fell in April on the heels of a strong rebound in intentions in March.

In the industrial component, the value of permits fell 20.2% to $342 million, after a 39.4% gain in March. The biggest factor was a major decline in construction intentions for plants in Ontario and New Brunswick. Both provinces had recorded huge gains for such projects in March.

In the commercial component, the value of permits declined 13.1% to $1.3 billion, after a 41.4% increase in March. April's decline was the result of a retreat in construction intentions for office buildings. Commercial intentions are now following a slightly downward trend after increasing from October 2005 to the beginning of 2007.

The largest drop (in dollars) in the commercial component occurred in Alberta (-47.3% to $220 million), following a 116.8% gain in March. In contrast, Ontario recorded the largest monthly advance (+3.9% to $495 million), as a result of higher demand associated with trade and services buildings.

In the institutional component, permits fell 35.1% to $323 million in April, the third consecutive monthly decline. The drop was due largely to lower construction intentions for medical buildings in eight provinces. Ontario showed the largest decline (in dollars) in the institutional component (-48.9% to $137 million), following a 62.4% increase in March.

Despite April's showing, several factors could have a positive impact on non-residential construction intentions. These include recent robust growth in corporate operating profits and strong retail and wholesale sales in the first quarter of 2007 as well as declining vacancy rates for office buildings in certain large centres.

Provincially, declines in non-residential permit values occurred in six provinces. In terms of dollars, the largest decreases occurred in Alberta (-34.0% to $346 million) and Ontario (-18.2% to $781 million). Both provinces had recorded strong growth in March.

Metropolitan areas: Only 14 record gains in overall permit values

The total value of building permits increased in only 14 out of 34 census metropolitan areas in April. However, 20 recorded gains in the value of residential permits, and only 13 did so in the non-residential component.

In the residential component, the largest increases (in dollars) occurred in Halifax, Toronto, Vancouver, Calgary and Edmonton. Halifax and Edmonton registered new record highs for residential permits, while Calgary recorded its highest value in nine months. Significant declines occurred in Victoria, Hamilton, Ottawa–Gatineau (Ontario part) and Montreal.

In the non-residential sector, the largest advances (in dollars) were in Halifax, London, Edmonton, and Vancouver. Significant losses occurred in Montreal, Toronto, Ottawa–Gatineau (Ontario part), Calgary and Kelowna. However, the gains were generally much smaller than the losses. Calgary posted its lowest value since January 2006.

Available on CANSIM: tables 026-0001 to 026-0008, 026-0010 and 026-0015.

Definitions, data sources and methods: survey number 2802.

The April 2007 issue of Building Permits (64-001-XWE, free) will be available soon.

The May building permit estimate will be released on July 5.

To order data, contact Jasmine Gaudreault (toll-free 1-800-579-8533; 613-951-6321; bdp_information@statcan.gc.ca). For more information, or to enquire about the concepts, methods or data quality of this release, contact Haaris Jafri (613-951-0040), Investment and Capital Stock Division.

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