Current economic indicators table

Key economic indicators report

Third consecutive monthly decline in building permits

Latest available: January 2008
Release date: March 6, 2008

The value of building permits fell 2.9% in January, defying expectations for a 1% rise, and marking the third consecutive monthly decline. Residential permits dropped 13.9% on the back of a 26.9% decline in multi-unit permits as well as lower single-family permits. Non-residential permits, however, rallied back, rising 16.4%. After recording the largest annual gain in three years in 2007, residential permits have turned decidedly weaker in recent months, pointing to a slower pace of residential construction activity in 2008. 

The rebound in non-residential permit demand was broad-based with gains in all three categories - institutional, commercial and industrial projects.  On the residential side, the decline was also broad-based. Multi-unit permits fell 26.9% and single-family permits dropped by 5.4% as the steady erosion in affordability in 2007 tempered demand. 

The largest increase was reported in Ontario where rising permits for non-residential projects offset weaker demand for housing permits.  Quebec saw a similar pattern with residential permits off but higher non-residential permit demand, while Alberta's gain was based on increased demand for permits for industrial and institutional projects. 

Residential permit demand has shown a slowing trend in the past three months and January's level stood 9% below the level a year earlier. Non-residential permits, conversely, improved after a couple of lacklustre months and were 5.2% higher than in January 2007.

StatsCan's survey of private and public investment intentions showed that firms planned to increase spending on non-residential construction projects by 7.9% this year with a more modest 1% rise forecast for residential housing construction. The persistent erosion in affordability in 2007 evident in RBC's Housing Affordability Index and tightening in credit conditions in recent months point to slower housing market activity ahead.