Canada Building Permits Rise to Record on Commercial Work
Canadian building permits rose to a record in July as the value of projects such as shopping malls and office buildings almost doubled, government figures showed.
The value of municipal permits rose 20.7 percent to C$7.99 billion ($7.70 billion), Statistics Canada said today in Ottawa. The gain exceeded all 10 forecasts in a Bloomberg economist survey that had a median increase of 3.5 percent.
Permits fornon-residential construction rose 45.5 percent to a record C$3.86 billion, including an 89.2 percent jump in commercial buildings to C$2.56 billion. Cabela’s Inc. (CAB), a fishing and hunting retailer, said July 25 it would begin work on a 70,000 square foot store in Barrie, Ontario that will open next year.
The country’s dollar rose after the report added to signs that domestic demand continues to lead the world’s 11th-largest economy as exports falter. Statistics Canada reported faster-than-expected job growth last week and said Aug. 30 that consumption led output growth during the second quarter.
“It’s a good sign for the economy” and may add to growth in July, said Benjamin Reitzes, a senior economist at BMO Capital Markets in Toronto. The gains in commercial permits still aren’t “sustainable,” he said.
The building permits figures have been volatile, with a gain of as much as 29 percent and a decline of 23 percent reported since the start of 2011.
Canada’s dollar extended gains after the report, strengthening 0.3 percent to C$1.0377 per U.S. dollar at 10:07 a.m. in Toronto after touching C$1.0364, the strongest since Aug. 20. One dollar buys 96.37 U.S. cents.
Statistics Canada said today that the value of residential building permits rose 4.1 percent in July to C$4.14 billion. Single-family housing permits also rose by 4.1 percent, to C$2.24 billion, while multiple-unit projects such as apartments and condominiums increased 4.2 percent to C$1.89 billion.
The housing market gains come as Bank of Canada policy makers predict housing will be a drag on economic growth this year and next, after they warned about overbuilding in cities such as Toronto and Vancouver. The central bank last week kept its key lending rate at 1 percent and said there are signs of a “constructive evolution” of household imbalances after debt levels reached a record share of income last year.
The value of permits in July was 17.2 percent higher than 12 months earlier, Statistics Canada said. The agency today also revised its estimate of June’s decrease to 10.6 percent from 10.3 percent.
By province, permits rose the most in Ontario on commercial projects while British Columbia intentions dropped, led by multi-family housing and commercial work, Statistics Canada said.
To contact the reporter on this story: Greg Quinn in Ottawa at email@example.com