Nov. 5 (Bloomberg) -- Canadian municipal building permits fell at the fastest pace in more than a year in September on declines in non-residential projects.
The value of permits fell 13.2 percent to C$6.48 billion ($6.50 billion) from a record high the prior month, Statistics Canada said today in Ottawa. The total value of permits was the lowest since January. Economists forecast a 2.8 percent decline according to the median of six responses to a Bloomberg survey.
The report suggests Canadian firms may be deferring decisions to build new offices and factories pending the outcome of U.S. elections tomorrow and a moderation in the European debt crisis, which officials including Bank of Canada Governor Mark Carney have said is crimping exports and investment. Carney has urged the nation’s companies to take advantage of low interest rates and spare cash on their balance sheets to invest and build competitiveness.
The central bank has kept its overnight interest rate at 1 percent since September 2010 to encourage borrowing and spending, and has said business investment and consumption will help lead an economic expansion through next year.
Permits for non-residential construction dropped 30.8 percent to C$2.24 billion in September, reversing the prior month’s 27.7 percent gain, Statistics Canada said.
“I’m not convinced it’s the start of a trend,” for non-residential work, said Doug Porter, deputy chief economist with BMO Capital Markets in Toronto. Those permits are still 9.5 percent higher on a year-over-year basis, he said, and the figures are “incredibly volatile.”
The Canadian dollar depreciated 0.1 percent to 99.66 cents per U.S. dollar at 10:25 a.m. in Toronto. One Canadian dollar buys $1.0035.
Work on institutional buildings, including schools and hospitals, plunged 44.5 percent to C$586 million. Industrial permits fell 52.1 percent to C$320 million. Commercial projects such as offices fell 11.8 percent to C$1.33 billion.
Permits for housing projects such as apartments and condominiums rose 0.4 percent to C$4.24 billion.
Single-family housing permits rose 3.4 percent to C$2.50 billion, while multiple-unit projects fell for a third month in September, by 3.8 percent to C$1.74 billion.
The agency also boosted the estimated value of permits for August to C$7.46 billion from C$7.35 billion, further increasing what had already been a record high. The percentage gain for August was revised to 9.5 percent from 7.9 percent.
Even with the monthly September decline, the value of permits remained 15.6 percent higher than the same month a year earlier, Statistics Canada said.
Canada’s federal housing agency today also boosted its forecast for the start of work on new dwellings this year to 213,700 units from an August prediction of 207,200. Canada Mortgage & Housing Corp. also said housing starts will decline to 193,600 units in 2013.
To contact the reporter on this story: Greg Quinn in Ottawa at firstname.lastname@example.org