Building booms across country

[ErickMontreal]

Building booms across country

 

HEATHER SCOFFIELD

 

Globe and Mail Update

 

June 5, 2008 at 9:10 AM EDT

 

OTTAWA — Building permits in Canada soared in April, rising 14.5 per cent from March because of widespread residential and non-residential activity in all provinces, Statistics Canada said Thursday.

 

The jump means contractors took out $6.4-billion worth of permits, the highest level since last October.

 

“Canadian builder permits were on a tear in April,” Stewart Hall, market strategist for HSBC Canada, said in a note to clients.

 

The gain surpassed economists' expectations by a long shot. They had been expecting a 0.5 per cent increase, after a drop of 4.5 per cent March.

House under construction

The Globe and Mail

 

Building permits are a notoriously volatile economic indicator, and economists warned not to get too excited about the big monthly leap.

 

The general trend for building permits in both the residential and non-residential sectors has been down since last summer, Statscan noted.

 

Residential permits rose 13.4 per cent from a month earlier, mainly because of growth in multi-family units such as condominiums. Over the past five years, demand has gradually shifted away from more expensive single-family homes to more affordable multi-family buildings, Statscan said.

 

In April, permits for multi-family units rose 19.1 per cent, while single family homes declined 0.6 per cent.

 

“This report does suggest that some improvement in building activity may lie ahead for the Canadian housing sector,” said Millan Mulraine, economics strategist with TD Securities. “However, the fact that all of this increase came from the volatile multi-units component does suggest ... some give-back in the coming month.”

 

In the non-residential sector, the value of permits rose 16.5 per cent from a month earlier, because of strong commercial intentions. Indeed, commercial permits rose 20.2 per cent, as interest in building hotels and retail outlets surged.

 

Industrial permits rose 6.7 per cent, after a large drop in March, as Alberta manufacturing and primary industries regained some interest.

 

Institutional building permits rose 13 per cent in the month, driven by projects for new medical buildings.

 

“The non-residential sector continued to be positively affected by low office vacancy rates and a vigorous retail sector, despite a drop in corporate profits,” Statscan said.

 

Regionally, all provinces saw gains in April, especially in Ontario, British Columbia, Alberta and Quebec, which all posted double-digit increases.

 

Ontario saw the largest increase in dollar terms, with a $2.4-billion leap in the value of permits issued, or a jump of 12.5 per cent. Multi-family homes were the driving force.

 

By city, the largest increase in dollars was in Toronto, again because of multi-family units.

 

“While these gains suggest we will some new housing activity going forward, some of this growth is on the back of declines experienced at the beginning of the year,” said economists at Bank of Nova Scotia. “Thus, despite the fact that permits surged in April, the overall trend remains to the downside.”

 

http://www.reportonbusiness.com/servlet/story/RTGAM.20080605.wbuildingpermits0506/BNStory/Business/home