From the Conference Board of Canada: Commercial is up, Residential is down

Ottawa, September 11, 2019—  July numbers show that the value of non-residential building permits issued in Canada rose 2.9 per cent compared to June and their value is up 6.1 per cent when compared year-to-date. These numbers suggest that non-residential construction will contribute to economic growth in the coming months. The remaining question? Will this growth the enough to offset to decrease in value of alternate building permits? Conference Board of Canada senior economist Henry Diaz offers an Economic Quick Take.

“The value of building permits rose in July in Canada’s Census metropolitan areas (CMAs), led by big jumps in single dwelling, institutional and governmental building permits. However, the value of building permits is down 1.1 per cent on a year-to-date comparison with the same period last year. In contrast, Vancouver is the only one of Canada’s six largest metropolitan centres that boasts positive year-to-date growth in the value of building permits.” says Diaz.

Insights:

• The value of industrial building permits, which usually signal the construction of warehouse and manufacturing buildings, is up a more modest 2.4 per cent year-to-date in Canada’s metropolitan areas. This aligns with our call of slowing manufacturing investment growth.
• The value of commercial building permits, which signal the construction of office and retail buildings, increased at a healthy pace of 7.1 per cent year-to-date. This is a sign of continued strength of the commercial building market in Canada’s urban centres.
• The value of residential building permits is trending down. Despite a 5.1 per cent jump in July, the value of these permits has declined by 5.1 per cent on a year-to-date basis.
• Edmonton shows the largest year-to-date decline among Canada’s big six. The value of building permits in the provincial capital is down 30.4 per cent compared to the same period last year.
• In Toronto, the value of building permits is down 0.9 per cent year-to-date. Industrial building and single dwelling permits are the main culprits, with respective year-to-date declines of 23.7 per cent and 14.0 per cent.
• In Vancouver, a 12.2 per cent year-to-date growth in the value of permits is being fueled by non-residential construction. The value of permits in this sector is up 47.2 per cent year-to-date, compared with the same period last year.

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