National rise in building permits led by Quebec

Ground Water Canada
November 07, 2018
By Ground Water Canada
Ottawa – A national increase in the value of building permits being issued in September was driven by higher construction intentions in Quebec, according to the latest report from Statistics Canada.

Canadian municipalities issued $8.1 billion worth of building permits in September, up 0.4 per cent from August, the report said. That’s up from $7.9 billion worth in September 2017 (which followed a significant rise by 3.8 per cent from August 2017).

Notably, the value of institutional building permits rose 16.4 per cent from August to $806 million. This includes buildings used to house public and semi-public services such as those related to health and welfare, education, or public administration, and buildings used for religious services.

Here is a breakdown by Statistics Canada of where building permits are being issued and some of the contributing factors.

Non-residential sector: Higher construction intentions for institutional buildings
The value of building permits in the non-residential sector was up 0.6 per cent to $3.1 billion in September, due to higher construction intentions for institutional buildings.

In the institutional component, the value of building permits rose 16.4 per cent from August to $806 million. The increase in the value of permits mainly stemmed from post-secondary institutions and nursing homes. Six provinces reported gains, led by Quebec.

In the commercial component, $1.7 billion worth of permits were issued in September, down 3.3 per cent from the previous month. Permits for office buildings accounted for the majority of the decline. Five provinces reported decreases, with the largest drop in British Columbia.

The value of building permits in the industrial component fell 5.7 per cent to $636 million. Five provinces reported declines, with the most significant decreases in Quebec and British Columbia.

Residential sector: Gains driven by the multi-family dwelling component
In the residential sector, the value of building permits edged up 0.3 per cent to $4.9 billion, posting the first increase in four months. Higher construction intentions for multi-family dwellings contributed to the rise.

In the multi-family dwelling component, the value of permits rose 1.5 per cent to $2.7 billion. The increase was led by Quebec, where $752 million worth of building permits were issued, up 49.1 per cent from August.

The value of building permits for single-family dwellings was down 1.2 per cent to $2.2 billion in September, the fourth consecutive monthly decrease. Four provinces reported declines, most notably Ontario and Alberta.
 
Municipalities approved the construction of 19,073 new dwellings in September, up 7.8 per cent from August. The increase was attributable to both single-family (+3.3 per cent) and multi-family (+9.4 per cent) dwellings.
 
Provinces and census metropolitan areas: Record high posted in Quebec
The value of building permits rose in six provinces in September. The largest gain was in Quebec, followed distantly by Newfoundland and Labrador. Meanwhile, the total value of building permits was up in 15 of 36 census metropolitan areas (CMAs), led by Montreal and Toronto.

In Quebec, the value of building permits increased 25.4 per cent to $1.8 billion – a record high for the province. The gain stemmed primarily from the CMA of Montreal, where $1.1 billion worth of permits were issued in September (+64.4 per cent) following a 36.5 per cent decrease in August.

The value of building permits in Newfoundland and Labrador was up 102.4 per cent to $105 million in September, the highest value since August 2014. The increase was largely due to higher construction intentions related to cannabis processing buildings.

In Ontario, the value of permits increased 0.8 per cent to $3.0 billion in September, following an 8.1 per cent decline in August. The value of permits in the Toronto CMA rose 18.9 per cent to $1.5 billion, the first gain in four months. In the CMA of St. Catharines–Niagara, a record high of $99 million (+46.3 per cent) was reported in the residential sector.

Both August and September saw close to $50 million worth of permits in the multi-family component, approximately 40 per cent higher than the previous record set in June 2016.

Third quarter 2018
Canadian municipalities issued $24.2 billion worth of building permits in the third quarter, down 1.1 per cent from the second quarter. In the residential sector, both single-family (-5.7 per cent) and multi-family (-5.8 per cent) dwellings were down.

Meanwhile, the value of permits in the non-residential sector rose 7.5 per cent to $9.2 billion, led by the institutional and industrial components.

Alberta contributed the most to the decline in the single-family dwelling component, with the value of permits down 24.9 per cent from the previous quarter. Municipalities issued $958 million worth of permits in the third quarter – the lowest value reported since the second quarter of 2009.

The quarterly decline for multi-family dwellings stemmed from Ontario, where municipalities issued $3.0 billion worth of building permits in the third quarter of 2018 (-8.5 per cent). This followed a record high of $3.3 billion the previous quarter.

In British Columbia, the value of building permits increased 7.9 per cent to $4.7 billion in the third quarter. All components in the non-residential sector reported gains, with the commercial component increasing in seven of the last eight quarters. The decline in the residential sector (-5.3 per cent) was mainly due to lower construction intentions for single-family dwellings, which dipped below the $1 billion mark for the first time since the fourth quarter of 2015.

The value of building permits in Quebec was up 2.5 per cent to $4.9 billion in the third quarter of 2018. The industrial component rose 48.1 per cent, mainly due to high value permits that were issued for the new Radio-Canada building in Montreal. In the multi-family dwelling component, $1.9 billion worth of permits were issued, up 0.8 per cent from the previous quarter. Construction intentions for multi-family dwellings in the CMA of Montreal have exceeded the $1 billion mark for five consecutive quarters.

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