Analysis: August Permits -5.5% on Widespread Declines>

--Residential -2.8%; Non-Residential -10.0%

     By Yali N'Diaye 

     OTTAWA (MNI) - The value of permits issued by Canadian 

municipalities, an indicator of future construction activity, fell 5.5% 

to C$7.5 billion in August, the largest drop since September 2016, 

Statistics Canada reported Tuesday. 

     The monthly decline built on a 2.8% decrease the previous month, 

leaving the value of permits up just 0.6% from August 2016, supporting 

the Bank of Canada's scenario of a housing slowdown in the second half 

of this year, in response to higher interest rates and tighter housing 

finance regulations. 

     Regionally, Toronto and Vancouver were among the metropolitan areas 

recording lower permits in August, with construction intentions down 

16.6% in Toronto, the largest monthly drop since September 2015. Permits 

fell 12.8% in Vancouver. 

     Overall, permits were down 10.5% in Ontario, and down 9.9% in 

British Columbia, while they increased 6.2% in Alberta. 

     Contractions were recorded across major categories in August, with 

construction intentions down 2.8% in the residential sector, and down 

10.0% in the non-residential sector, the largest decline since December 

2016. 

     The weakness in the residential sector was due to multi-family 

dwellings, which recorded a 6.0% decrease on the month and an 8.5% drop 

year-over-year. 

     Year-to-date, however, overall permits were still up 8.7% compared 

to the same period last year, the agency pointed out, owing to 

multi-family dwellings. Statistics Canada also noted that the latter 

category has been on an upward trend since 2009, gradually closing the 

gap with single-family dwellings, perhaps the result of population 

density in some areas. 

     In fact, June 2017 was the first month ever that the value of 

multi-family dwelling permits surpassed that of single-family dwellings. 

     Permits for single-family dwellings edged up 0.4% in August after a 

3.7% increase in July. 

     In the non-residential sector, all major components contributed 

negatively, with permits down 17.3% in the industrial sector, 17.2% in 

the institutional sector, and down 2.7% for commercial buildings. 

 --MNI Ottawa Bureau; temail: yali.ndiaye@marketnews.com

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