Value of Canadian Building Permits Shrinks in June, Marking Second Consecutive Decline

On Monday, Statistics Canada (StatCan) reported that the total value of building permits in Canada fell 13.9% to $9.9 billion (CAD) in June, extending the decline observed in May. On a constant dollar basis (2017=100), permits declined 14.3% in June, following a 13.4% decline in May.

Residential

The total value of residential permits decreased 11.5% to $6.5 billion in June. Overall, 9 of the 13 provinces and territories contributed to the decline. Substantial declines in multi-unit construction intentions—down 19.8%, or $937.1 million—led the overall residential decline.

However, intentions in single-family homes increased 4.0% to $2.6 billion.

Canadian municipalities authorized 20,400 dwelling units in June, bringing the total over the last 12 months to 263,400 units.

Nonresidential

The total value of nonresidential permits decreased 18.1% to $3.5 billion in June. The industrial component dropped 42.6%, or $447.2 million, following a 21.3% increase in May. Meanwhile, monthly declines in the commercial component—down 15.6%, or $331.1 million—outweighed modest gains in the institutional component—up 1.0%, or $11.1 million.

Q2 Summary

The total value of building permits in Q2 was $34.6 billion, up 2.1% from $33.9 billion in Q1. This is the second consecutive quarterly increase and the fourth highest quarterly value in the series.

Intentions in the residential sector grew 6.9% to $22.2 billion. Across Canada, 70,200 residential units were authorized in Q2, up 9.1% from Q1.

Overall growth in the value of building permits from Q1 to Q2 was tempered by declines in nonresidential intentions—down 5.6% in Q2, with all three components lower. The industrial component was down 14.8%, or $437.5 million—the largest decline—followed by the commercial component (down 3.0%, or $199.9 million) and the institutional component (down 2.7%, or $95.5 million).