Value of Building Permits Slips in April

June 13, 2016

The value of building permits issued by municipalities edged down 0.3% to $6.9 billion in April. This marked the second consecutive monthly decline and was largely the result of lower construction intentions in Ontario, Quebec and Nova Scotia.

Chart 1: Total value of permits

The value of residential permits declined 1.8% to $4.3 billion in April. The decrease in the value of multi-family dwelling permits more than offset the gain posted by single-family homes. Declines were reported in six provinces, led by Ontario, followed by Quebec and Nova Scotia.

In the non-residential sector, the value of building permits was up 2.5% to $2.5 billion in April, following a 21.4% drop the previous month. The increase was the result of higher construction intentions for institutional and commercial buildings. Gains were posted in six provinces, with Alberta responsible for most of the increase.

Residential sector: Lower construction intentions for multi-family dwellings

In the multi-family dwellings component, the value of permits declined 6.2% to $1.9 billion in April, the third drop in four months. Decreases were posted in seven provinces, led by Ontario, where the decline followed a 31.6% increase the previous month. Quebec and Nova Scotia followed a distant second and third. In contrast, multi-family dwelling construction intentions in Alberta increased significantly.

The value of permits for single-family dwellings was up 1.8% to $2.5 billion in April, a third consecutive monthly increase. Compared with the same month in 2015, the value of permits was relatively unchanged in April. Advances were widely spread among half the provinces. Alberta and New Brunswick led the increase, while Manitoba posted the largest decline.

Municipalities approved the construction of 16,232 new dwellings in April, up 3.0% from the previous month. The increase was led by multi-family dwellings, which advanced 1.6% to 10,202 new units. Single-family homes were up 5.6% to 6,030 new units.

Non-residential sector: higher intentions for institutional and commercial buildings

The value of institutional building permits was up 15.4% to $695 million in April, after posting a 10.5% decline the previous month. Higher construction intentions for universities and other government buildings contributed to the advance. Gains in Alberta offset declines observed in four provinces, led by Ontario.

In the commercial component, the value of permits was up 2.5% to $1.5 billion in April, following a 26.9% decline in March. The advance was largely the result of higher construction intentions for recreational facilities, distribution warehouses and research centres. Gains were reported in seven provinces, led by Ontario and Manitoba.

The value of industrial building permits fell for a third consecutive month, down 16.5% to $346 million in April, the lowest level since October 2013. Lower construction intentions for manufacturing plants and transportation-related structures led the decline. Decreases were reported in eight provinces, led by Ontario.

Provinces: Ontario posts the largest decline

Half the provinces posted lower construction intentions in April, led by Ontario, followed distantly by Quebec and Nova Scotia. Conversely, Alberta reported the largest gain.
The value of permits in Ontario was down 9.2% in April, following two consecutive monthly gains. Every component posted a decline, with the exception of commercial buildings. The decrease was mainly attributable to lower construction intentions for multi-family dwellings, institutional structures and industrial buildings. The value of permits for multi-family dwellings fell 20.1% in April, following a 31.6% increase the previous month.

In Quebec, the value of permits declined 4.9% to $1.2 billion in April, after increasing the two previous months. The decrease was attributable to lower construction intentions for multi-family dwellings and, to a lesser extent, industrial buildings. All other components posted advances.

Construction intentions in Nova Scotia fell 45.6% to $65 million in April, following a 62.0% increase in March. Every component recorded lower permit values, led by multi-family dwellings, institutional structures and commercial buildings.

In Alberta, the value of building permits increased 27.7% to $1.2 billion in April. The advance was largely attributable to multi-family dwellings and institutional structures.
Census metropolitan areas: Toronto and Hamilton register the largest decreases

In April, the value of building permits was down in half of the 34 census metropolitan areas. The largest declines were registered in Toronto and Hamilton, while Calgary posted the largest advance.

The value of building permits in Toronto was down 11.0% in April, marking a second consecutive monthly decline. For the first time since February 2014, lower construction intentions were observed in every component. The decrease was led by commercial building and multi-family dwelling construction.

In Hamilton, the value of construction permits was down 61.1% to $87 million in April, following significant increases the previous two months. The decline was led by lower construction intentions for multi-family dwellings and single-family homes.

In contrast, Calgary posted the largest gain in the value of building permits issued in April, up 76.0% from March. Higher construction intentions for multi-family dwellings, institutional structures and commercial buildings contributed to the advance.

Source: Statistics Canada, www.statcan.gc.ca/daily-quotidien/160608/dq160608a-eng.htm.