Building permits at highest in five years

Building permits totalling just over $7-billion were issued by Canadian municipalities in May, the highest level of activity in five years, StatsCan said last week.

This was an unexpected jump of 7.4 per cent in building permit activity, whereas some industry observers, such as the authors of a recent report from Royal Bank of Canada, had been forecasting a drop in building permit applications.

StatsCan said the increases included a busy market for institutional buildings in Alberta, British Columbia and Saskatchewan, and for multi-family dwellings in British Columbia.

The value of residential building permits was $4.14 billion, driven by significant activity in British Columbia, Ontario and Alberta.

Emanuella Enenajor, an economist at CIBC World Markets, said that talk of a sharp slowdown in homebuilding may be premature. However, the Bank of Canada has signaled since April that it may hike interest rates, which may cool the construction market.