Non-residential is king of the building permit castle for March 2023
June 1, 2023 By Anthony Capkun
June 1, 2023 – Statistics Canada reports the total monthly value of building permits in Canada advanced 11.3% in March to $11.8 billion, led by sharply increasing growth in the non-residential sector.
The total monthly value of non-residential permits increased 32.0% to a record-high $5.2 billion, with 10 individual non-residential projects valued at over $100 million each.
The largest project of the month was the new $570-million General Motors and POSCO Chemical cathode active materials facility in Bécancour, Que., which led the value of building permits in the industrial component to sharply increase by 16.7% nationally. This project is linked to the Canadian Critical Minerals Strategy, says Statistics Canada, “for which further major investments in industrial projects are anticipated”.
Commercial (+41.5%) and institutional (+29.5%) construction intentions also posted significant monthly gains to support a record-high month for the non-residential sector.
Meantime, residential construction intentions stalled. Following a promising February, March saw the value of new residential permits taper off (-0.9%) to $6.6 billion. Nationally, permits for 21,400 new dwellings were issued in the month.
British Columbia continued to increase with strong construction intentions (values up +30.9%, + $321.9 million) in March, concentrated in metropolitan high-rise multi-dwelling developments.
The four Atlantic provinces collectively had notable monthly gains in multi-dwelling (+40.6%, +$48.1 million) and total residential (+14.0%, +$39.5 million) permit values.
These gains were offset by declines in five provinces. Ontario (-8.1%, -$246.6 million) weighed down the sector the most, while Saskatchewan (-27.0%, -$12.7 million) posted the largest proportional decline of the month.
The total value of building permits in the first quarter of 2023 gained 4.8% from the last quarter of 2022 to $32.4 billion, ending three consecutive quarterly declines.
The commercial component (+17.2%) led the quarterly growth, much of which was from building permits issued in March. Overall, the non-residential sector expanded 16.1% to a record-high $13.0 billion in the first quarter of 2023, greatly exceeding the previous quarterly record of $12.4 billion. This coincided with the Bank of Canada’s decision to pause interest rate hikes, says Statistics Canada—the first reprieve since initial hikes started in March 2022.
This is yet to be reflected in residential construction intentions, which declined 1.6% to $19.4 billion, sliding for the third consecutive quarter. Declines in the value of residential permits were posted in six provinces, which more than offset gains in Ontario, Manitoba, Nova Scotia, and Prince Edward Island.
Manitoba posted the most notable quarterly gains in both the value of residential permits (+27.5%) and the number of new dwelling units created (+58.7%), as their quarterly population growth simultaneously edged out the national average.
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