Value of June Building Permits Down 5% from May

August 10, 2016

Municipalities issued building permits worth $6.4 billion in June, down 5.5% from the previous month. Lower construction intentions for multi-family dwellings and institutional buildings were mostly responsible for the decline.

In the residential sector, the value of building permits fell 5.0% to $4.1 billion. This was the third consecutive monthly decline. The decrease in the value of multi-family dwelling permits more than offset the gain posted by single-family homes. Five provinces recorded declines, led by British Columbia and Ontario.

The value of non-residential permits was down 6.2% to $2.3 billion in June, led by lower construction intentions for institutional buildings. Decreases were registered in seven provinces. Ontario and the Northwest Territories posted the most notable declines.

Residential sector: lower construction intentions for multi-family dwellings

The value of permits for multi-family dwellings was down 15.8% to $1.7 billion in June. Declines were recorded in seven provinces, led by Ontario and British Columbia.
Construction intentions for single-family homes were up 4.2% to $2.4 billion, the fourth advance in five months. The gains were spread among seven provinces, led by Ontario.

Municipalities approved the construction of 14,960 new dwellings in June, down 8.1% from the previous month. The decline was attributable to multi-family dwellings, which decreased 13.7% to 9,280 new units. Conversely, single-family homes were up 2.7% to 5,680 new units.

Chart 2: Residential and non-residential sectors

Non-residential sector: Lower construction intentions for institutional and industrial buildings

The value of institutional building permits was down 20.6% to $664 million in June, following notable gains the two previous months. Lower construction intentions for hospitals were largely responsible for the drop. Declines were posted in six provinces. The most notable decreases were registered in Ontario and the Northwest Territories, both of which recorded large increases the previous month. Saskatchewan reported the largest advance for institutional building intentions.

In the industrial component, the value of permits fell 8.7% to $346 million. Lower construction intentions for primary industry buildings were mostly responsible for the decrease. Declines were registered in four provinces, led by Ontario and Quebec.

The value of commercial building permits rose 4.3% to $1.3 billion in June, after recording a 14.8% decline in May. The advance was attributable to higher construction intentions for retail and wholesale outlets, recreational facilities, and warehouses. Four provinces reported increases, led by Quebec.

Provinces: Ontario and British Columbia post largest declines

The total value of permits was down in six provinces in June, led by Ontario and British Columbia. The Northwest Territories also registered a notable decline.

In Ontario, the value of building permits dropped 8.4% to $2.6 billion, the second decline in three months. The decrease was largely attributable to lower construction intentions for multi-family dwellings and institutional structures. The value of permits for multi-family dwellings fell 20.4% in June, after posting a 20.9% increase the previous month.

The value of permits in British Columbia was down 11.5% to $1.0 billion in June, after two consecutive monthly advances. Multi-family dwellings led the decline, followed by commercial buildings.

Following a record high in May, the value of building permits in the Northwest Territories was down 90.8% to $9.8 million in June. The decline was attributable to lower intentions for medical facilities.

In contrast, Saskatchewan posted the largest gain in June, up 72.4% to $288 million. The increase in the value of permits was mainly attributable to higher construction intentions for institutional structures; specifically, educational facilities.

Census metropolitan areas: Vancouver registers the largest decrease

In June, the total value of building permits was down in 17 of the 34 census metropolitan areas. The largest declines were registered in Vancouver and Kitchener-Cambridge-Waterloo.

The value of permits in Vancouver fell 25.2% to $580 million in June, mainly due to lower construction intentions for multi-family dwellings and, to a lesser extent, commercial buildings.

In Kitchener–-Cambridge-Waterloo, the value of permits was down 47.1% in June, following a 40.3% increase in May. The decrease was led by lower construction intentions for multi-family dwellings and commercial structures.

Conversely, Saskatoon and Regina posted large gains, due to higher construction intentions for institutional buildings.

Source: Statistics Canada, http://www.statcan.gc.ca/daily-quotidien/160808/dq160808a-eng.htm.