Canada Construction Ends 3 Month Growth Spurt

Building permit values in Canada fell by 27.3 percent to $6.7 billion in August with declines across the board in residential and nonresidential construction following 3 months of double digit gains, according to data published by Statistics Canada.

The Royal Bank of Canada had forecast a decline of 6.5 percent from July’s record of $9.15 billion; Bank of Montreal came closer with a forecast of -20 percent. The losses were led by fewer construction intentions for nonresidential buildings in Quebec and residential buildings in Ontario.

Value of permits for residential construction fell 15.9 percent to $4.2 billion after five months of gains. Values for multifamily dwellings plummeted 28.6 percent to $1.8 billion after soaring 42. 8 percent in July.

The greatest decline in residential permit authorization was seen in multiple-family units that fell 26.3 percent to 10,320 dwellings month over month. Single family authorizations slid 2.7 percent to 6,200 units. Municipalities authorized construction of 16,520 new dwellings in August, down from 18.9 percent in July.

In nonresidential construction, value of permits fell 40.6 percent to $2.5 billion after four months of gains. Institutional building construction values fell decreased all provinces except Prince Edward Island, dropping 76.0 percent to $446 million. Commercial permit values fell 12.1 percent to $1.6 billion after increasing 1.2 percent in July. Values for industrial construction permits dropped 15.2 percent to $454 million, falling for the second consecutive month.

The August report comes on the heels of a flat output growth in July and a trade deficit in August. The Canadian dollar weakened 0.3 percent following Tuesday morning’s permit report.