Building conditions in Canada have eased but remain strong, with the latest figures showing a drop in the value of new building work coming in throughout the country in January, though the industry remains high by recent standards.
Following a 10.5 per cent increase in December, the seasonally adjusted value of all building permits across the country fell by 12.3 per cent in January. The more volatile non-residential sector dropped by almost one-quarter (23.1 per cent), while permits for residential dwellings dropped in value by 6.6 per cent.
Despite the decline, the overall value of building permits issued is still up by 11.6 per cent when compared with one year ago (see chart). Moreover, at around $6.2 billion Canadian dollars, the value of buildings approved in January this year is up almost 50 per cent when compared with the same month three years ago.
This means that while the pace at which new building work is coming in has slowed over the past month, Canadian building activity remains robust.
Residential building conditions remain strong. Despite a dip in January, the dollar value of issued permits for new residential building remains near four-and-a-half year highs. Likewise, the number of permits issued for new residential dwellings is up 5.7 per cent when compared with one year ago.
Likewise, with the value of non-residential building permits up 5.5 per cent compared with the same period last year, the overall volume of new work coming in in this area is reasonably strong. These headline numbers, however, disguise the disparity between non-residential sectors, with the volume of new building work remaining very strong in office and commercial buildings (up 26.1 per cent) but on the decline in industrial and institutional buildings (down 22.1 per cent and 20.7 per cent respectively).
Further disparities exist across regional areas. In Prince Edward Island and the Northwest Territories, strong residential building conditions mean the overall dollar value of new work coming in is up 88.5 per cent and 66.1 per cent respectively compared with January last year, while strong non-residential building conditions are powering the industry in Manitoba (up 42.8 per cent in the same period).
By contrast, the Yukon, which has lost much in the way of gas exploration to Alberta in recent times, and Quebec, are struggling. New building work in Yukon is down 50.4 per cent compared with January last year, whereas construction in Quebec is down 16.2 per cent.
The fallback in new building work (albeit with residential remaining strong) comes amid a broader easing in Canada’s economy, where growth slowed to 0.4 per cent in December after growing by a full percentage point in the September quarter.
