Canadian building permits fell in August from the previous month’s record on a decline in commercial projects such as retail stores and office buildings.
The value of municipal permits dropped 21.2 percent to C$6.34 billion ($6.14 billion), following a revised 21.4 percent jump in July, Statistics Canada said today in Ottawa. Economists forecast a 7.4 percent fall according to the median of eight responses to a Bloomberg survey.
The Bank of Canada is counting on a shift in demand to business investment and exports from debt-fueled consumer spending, a process that has taken longer than expected, Senior Deputy Governor Tiff Macklem said in a speech last week. The central bank has kept its overnight interest rate at 1 percent since September 2010 to encourage borrowing and spending.
“It’s a little bit worrying to see the weakness on the non-residential side, though it did show a strong gain last month,” said Paul Ferley, assistant chief economist at Royal Bank of Canada in Toronto. “It’s not indicating non-residential is poised to start leading growth.”
Canada’s dollar declined 0.3 percent to C$1.0322 per U.S. dollar at 9:43 a.m. in Toronto. One Canadian dollar buys 96.88 U.S. cents.
Permits for non-residential construction fell 37.9 percent to C$2.43 billion from the July record of C$3.91 billion, with commercial projects dropping 45.8 percent to C$1.40 billion.
Industrial permits declined 1.2 percent to C$526 million led by manufacturing plants, following July’s 17.7 percent rise, the agency said. Institutional permits dropped 36.7 percent to C$507 million led by Ontario schools and medical buildings.
Residential permits fell 5.4 percent to C$3.91 billion in August. Single-family housing permits declined 3.0 percent to C$2.17 billion and for projects such as apartments and condominiums were down 8.3 percent to C$1.74 billion.
“With this decline, the trend in the value of building permits has become relatively flat since the beginning of 2013,” Statistics Canada said in the report.
Toronto, Canada’s largest city, was the biggest driver of the August decline with permits falling 35.9 percent to C$1.25 billion on commercial, institutional and multifamily buildings. Vancouver permits rose 13.6 percent to C$583 million on multifamily housing and commercial buildings, Statistics Canada said.
The value of permits was 15.2 percent lower in August than the same month a year earlier.
To contact the reporter on this story: Greg Quinn in Ottawa at firstname.lastname@example.org