Building Permits Down 1.9% in May

July 14, 2016

Municipalities issued building permits worth $6.8 billion in May, down 1.9% from the previous month. Lower construction intentions for commercial buildings in Quebec and Ontario and single-family homes in Ontario contributed most to the decrease.

Chart 1: Total value of permits

 

 

 

 

 

 

 

 

 

 

 

 

The value of non-residential permits fell 3.3% to $2.5 billion in May, following a 1.9% increase in April. The decrease resulted mainly from lower construction intentions for commercial structures.

In the residential sector, the value of building permits was down 1.1% to $4.3 billion, following a 0.9% drop the previous month. The increase in the value of multi-family dwelling permits was not sufficient to offset the decline for single-family dwellings. Decreases were posted in six provinces, led by Alberta.

Non-residential sector: Lower construction intentions for commercial buildings

The value of commercial building permits was down 15.6% to $1.2 billion in May, a third consecutive monthly decline. The drop was largely the result of lower construction intentions for office buildings, recreational facilities and distribution warehouses. Decreases were reported in five provinces, led by Quebec, Ontario and Manitoba.

In the industrial component, the value of permits edged up 0.6% to $384 million, after posting a 7.8% decline the previous month. The advance was attributable to higher construction intentions for manufacturing plants. Gains were reported in six provinces, led by Ontario and Quebec.

The value of institutional building permits was up 20.3% to $842 million, a second consecutive monthly advance. Higher construction intentions for medical facilities led the increase. The largest gain was recorded in the Northwest Territories, followed by Ontario and Quebec.

Chart 2: Residential and non-residential sectors

 

 

 

 

 

 

 

 

 

 

 

 

Residential sector: Lower construction intentions for single-family dwellings

The value of permits for single-family dwellings decreased 7.2% to $2.3 billion in May, following three consecutive monthly increases. Declines were recorded in seven provinces, led by Ontario, followed distantly by New Brunswick and British Columbia.

In the multi-family dwellings component, the value of permits was up 7.1% to $2.0 billion in May, following a 5.8% decline in April. Advances were recorded in six provinces, led by Ontario, which had posted a 19.0% decline the previous month. Quebec and Nova Scotia were a distant second and third. In contrast, multi-family dwelling construction intentions in Alberta declined, following a 96.4% increase the previous month.

Municipalities approved the construction of 16,360 new dwellings in May, down slightly (-0.2%) from the previous month. The decline was the result of lower construction intentions for single-family dwellings, which decreased 10.6% to 5,519 new units. Multi-family homes were up 6.1% to 10,841 new units.

Provinces: Alberta posts the most notable decline

Lower construction intentions were posted in three provinces in May, led by Alberta, followed by Manitoba and New Brunswick. Conversely, the value of permits in the Northwest Territories reached a record high.

Following a 26.9% increase the previous month, the value of permits in Alberta fell 22.5% to $916 million in May. Every component posted a decline, except single-family dwellings. The decrease was led by multi-family dwellings and institutional structures.

The value of permits in Manitoba was down 32.3% to $200 million, after three consecutive monthly advances. Lower construction intentions for commercial and institutional buildings led the decline, although every component, except multi-family dwellings, posted a decrease.

In New Brunswick, the value of permits dropped 48.0% to $55 million, after posting strong gains the previous two months. Lower construction intentions were recorded for every component, led by single-family homes and institutional structures.

In contrast, the value of permits in the Northwest Territories reached a record high of $107 million in May. Higher construction intentions for institutional structures, specifically, medical facilities, were responsible for the advance.

Census metropolitan areas: Calgary registers the largest decrease

In May, the value of building permits was down in 16 of 34 census metropolitan areas. The largest declines were registered in Calgary, Winnipeg and Edmonton.

Following a 68.6% increase in April, the value of building permits in Calgary was down 34.8% in May. Every component recorded declines, led by multi-family dwellings, commercial structures and institutional structures.

In Winnipeg, the value of permits in May was down 40.2% to $137 million, following three consecutive monthly advances. The decline was led by lower construction intentions for commercial buildings and institutional structures.

The value of building permits in Edmonton was down 21.3% to $313 million, the second decline in three months. Lower construction intentions for institutional structures led the decrease.

In contrast, Kitchener-Cambridge-Waterloo and Vancouver recorded the largest gains, led by higher construction intentions for multi-family dwellings.

Source: Statistics Canada, http://www.statcan.gc.ca/daily-quotidien/160707/dq160707a-eng.htm.