MNI DATA ANALYSIS:Residentl Boosts May Canada Building Permits>

By Yali N'Diaye

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

municipalities increased 4.7% to C$8.2 billion in May, recovering all of 

the previous month's decline, suggesting stronger construction activity 

in coming months, data from Statistics Canada showed Tuesday. 

     Construction intentions were supported by the residential sector. 

     Regionally, the province of Ontario led the May increase, with 

permits up 12.0%, the largest advance since last October. 

     --RESIDENTIAL GAINS 

     Gains were concentrated in the residential sector, where permits 

were up 7.7%, following a 4.4% decrease in April. 

     Construction intentions for multi-family dwellings increased 8.8% 

to a record high C$3.1 billion, led by British Columbia, Ontario, and 

Alberta. 

     Single-family dwellings also increased, with a 6.2% gain on the 

month following four months of declines. Here too, Ontario led the 

monthly advance. 

     --NON-RESIDENTIAL DECLINES 

     In the non-residential sector, on the other hand, the value of 

building permits edged down 0.7%, as a result of mixed performances. 

     Industrial permits were up 10.6%, although it was not enough to 

offset April's 23.8% drop. 

     The gain in the industrial sector was not enough to offset lower 

construction intentions for institutional buildings (-3.9%) and 

commercial buildings (-3.1%). 

     --TORONTO LEADS GAINS 

     Regionally, gains in construction intentions were led by Ontario. 

     When looking at census metropolitan areas, the picture was mixed, 

with just 16 of 36 areas posting gains, led by Toronto. 

     Construction intentions were up 37.9% in Toronto, the largest gain 

since April 2015, led by the residential sector. 

     In Vancouver, another large housing market, building permits 

increased 12.1%.

     Overall higher construction intentions could contribute to lower 

prices, especially if tighter mortgage underwriting standards and higher 

interest rates continue to weigh on housing demand. 

     Canada Mortgage and Housing Corporation reported earlier Tuesday 

that the housing starts rose to a seasonally adjusted annual rate of 

248,138 units in June from 193,902 in May. 

     "The national trend in housing starts increased in June, reflecting 

a jump in the SAAR of multi-unit dwellings in urban centres in June to a 

historical high," said Bob Dugan, CMHC's chief economist. "Notably, the 

national inventory of newly completed and unabsorbed multi-unit 

dwellings has remained below its 10-year historical average so far in 

2018, indicating that demand for this type of unit has absorbed 

increased supply." 

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

[TOPICS: M$C$$$,MACDS$]