Hot home-building sector may cool
October residential permits rise 1.2% House construction to lag other areas
OTTAWA— The Canadian housing sector continued to shine in October as the value of building permits increased 1.2 per cent from September to $ 5.2 billion. That was much better than economists’ expectations of a 0.5 per cent decline in permits issued by municipalities. But the Canadian Construction Association is predicting housing activity will slow dramatically next year, while the non- residential building sector will grow.
Statistics Canada said yesterday that contractors took out $3.4 billion worth of housing permits in October, up 2.4 per cent from September and the sixth monthly gain in the residential sector in seven months.
Gains in single- and multifamily buildings pushed the value of residential permits to its highest value since June 2004. The agency also said the value of permits in the non- residential sector edged down 0.9 per cent in October to $ 1.9 billion. The showing was marked by the decline in the commercial sector, which more than offset the gains posted for industrial and institutional permits.
StatsCan said the total value of building permits issued between January and October reached $ 50.5 billion, up 10.9 per cent from the same period last year.
Figures compiled for the construction association by Informetrica Ltd. show the national building industry is likely to grow by 1.2 per cent in 2006. But the residential sector is expected to see a 2.8 per cent decline, compared with 2005, when that segment of the industry had an estimated 1.1 per cent increase over the previous year. The non- residential sector is expected to grow by 3.3 per cent in 2006, on top of 3.9 per cent growth in 2005.
Transportation engineering, oil and gas projects and electrical power engineering in particular will lead the way in 2006 for non-residential construction growth, the association said.
Construction employment in 2005 grew 5.4 per cent, although job growth is expected to moderate to only 0.8 per cent growth in 2006.
Manitoba, Quebec and British Columbia are forecast to lead the country in construction growth in 2006.
Other provinces are expected to see declines in growth, due primarily to lower housing construction numbers and a decrease in manufacturing- related building in Ontario.