Ottawa building-permit values drop in July

Momentum reverses in see-saw year for contractors

Building- permit values plunged like a dropped hammer in the capital in June, reversing earlier momentum in the construction sector.

Ottawa builders took out permits for projects worth $179 million, a 20.6 per cent drop from a month earlier, according to seasonally adjusted figures released Wednesday by Statistics Canada. The decline in Gatineau was sharper yet, with values falling 63 per cent, to $20 million.

Permit values are a key indicator of future building intentions, but big swings in Ottawa in recent months have hampered any assessment of the strength of the construction industry.

For the year, values in Ottawa are on pace with 2012, a strong year for the sector. Permit values in 2012 hit $2.08 billion, a 13 per cent increase from the year before.

In the first six months of 2013 Ottawa builders took out $1.05 billion in permits, for a decline of just 0.6 per cent from the first half of 2012. In Gatineau, permits for the January-June period dropped 63 per cent, to $242 million.

“Overall the market still is good — very good numbers — but the horizon is getting a little dark,” said John DeVries, president and general manager of the Ottawa Construction Association.

DeVries said big contractors remain busy but small and mid-size companies, as well as contractors that specialize in roads, sewers and similar infrastructure work, are finding less work available.

The industry is hoping the local economy can add jobs, spurring more residential and commercial building. Job figures for July will be released Friday by Statistics Canada.

Nationally, values fell 10.3 per cent in June, to $6.6 billion — the first decrease registered by Statistics Canada in six months.

A fall-off in the residential sector was the largest factor, with values down 12.9 per cent, to $4 billion.

In Ottawa, housing permits dropped 19 per cent, to $116 million, in June after rising 15 per cent in May. Permits for multi-family housing were down the most, at 26 per cent. Values for single-family homes fell 10 per cent.

In Gatineau, housing values fell 33 per cent in June, to $15 million.

Nationally, only Saskatchewan and the Northwest Territories showed gains in the residential sector.

In the non-residential sector, the value of building permits across Canada fell 9.5 per cent, to $1.4 billion.

Quebec, Ontario and Saskatchewan were behind most of the decline, while British Columbia posted the largest gain.