Canadian Building Permits Retreat in November

The value of Canadian building permits decreased in November, with declines seen across almost all building types.

According to Statistics Canada, the total value of building permits dropped by 3.9% from the previous month to a seasonally adjusted 10.87 billion Canadian dollars ($8.15 billion).

The retreat was steeper than anticipated, as economists at TD Securities were expecting a 1.4% drop. This decline follows a 3.0% increase in permits in October, which had been revised upward.

The decrease in residential permits issued in British Columbia and Quebec, driven by a decrease in intentions for multi-unit construction, more than offset residential gains in other regions of the country. Additionally, there was also a decline in the monthly value of non-residential building permits, primarily due to weakness in the commercial component.

On a year-over-year basis, the overall value of permits issued in November was 4.2% lower.

Building permits serve as an early indication of construction activity in Canada and are based on a survey of 2,400 municipalities, representing 95% of the country's population. However, it should be noted that the issuance of a permit does not guarantee immediate construction.

In the residential sector, construction intentions decreased by 2.8% from the previous month to C$6.96 billion. Intentions for multifamily dwellings saw a 4.7% decrease, while intentions for single-family homes experienced a slight 0.3% increase.

Permits for nonresidential buildings were down by 5.8% at $3.91 billion.