By Paul Vieira
Canadian building permits experienced a 6.1% increase in June, driven by plans to construct hospitals and other industrial complexes. According to Statistics Canada, the total value of building permits reached 11.60 billion Canadian dollars (equivalent to 7.45 billion U.S. dollars) after seasonal adjustment. Market expectations were not immediately available.
Year-Over-Year Decline
Compared to the same period last year, the overall value of permits issued in June saw a 4.2% decrease. Building permits serve as an early indicator of construction activity in Canada and are based on a survey of 2,400 municipalities representing 95% of the country's population. However, it is important to note that the issuance of a permit does not guarantee immediate construction.
Industrial and Institutional Sectors Drive Growth
Statistics Canada attributed the increase in June to significant gains in the industrial and institutional sectors, which saw increases of 51% and 67% respectively. Notably, plans to construct two hospitals, one in Quebec and one in British Columbia, played a significant role in driving institutional growth. Overall, nonresidential permits rose by 20.4% to reach C$4.69 billion in June compared to the previous month.
Residential Permits Experience a Decline
In contrast, residential permits saw a decline of 1.8% in June compared to May, with a total value of C$6.91 billion. This decrease can be attributed to a drop in plans to build multifamily units such as condominiums, although there was a slight increase in intentions to construct single-family homes. Residential permits also experienced a year-over-year decline of nearly 17%.
Second Quarter Performance
Statistics Canada reported that the total value of building permits for the second quarter dropped by 1.0% non-annualized compared to the first quarter, reaching over C$32 billion.
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