MNI DATA IMPACT:Housing Ups Builder Capacity to 2-Decade High>

By Greg Quinn and Anahita Alinejad 

     OTTAWA (MNI) - Canada's housing boom pushed construction companies 

to work their equipment at the highest rate in more than two decades in 

the third quarter. 

     The sector's capacity use rate rose to 91.2% from 89.5%, Statistics 

Canada said Wednesday from Ottawa. That was the highest figure since the 

third quarter of 2007. 

     "This gain coincided with higher investment in building 

construction, mainly residential," the agency's report said. 

     Faster home construction may ease strains from a housing boom that 

has driven up prices in Toronto and Vancouver, leading policy makers to 

force banks to hold more capital and tighten mortgage lending standards 

to avoid a crash. Sluggish supply growth and stronger demand fueled by 

low interest rates and population growth has pushed home prices beyond a 

million dollars in some of Canada's biggest cities. 

     The BOC decided not to cut the G7's highest policy interest rate 

this year in part because of signs that risky behavior in housing 

markets is returning. 

     The report also showed Canada's lopsided economic expansion 

continues. Overall capacity use fell to 81.7% in the third quarter from 

83.3% in the second quarter. The decline was led by Canada's struggling 

manufacturing and energy industries. 

--MNI Ottawa Bureau; +1-613-314-9647: greg.quinn@marketnews.com

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