September institutional permits drag values down
By Adam FreillCommercial Construction Industrial Institutional Residential
Despite monthly decline in non-residential building permits, intentions still stronger than September of 2022, reports Statistics Canada.
A 50 per cent drop in institutional permits brought the total monthly value of building permits in Canada down by 6.5 per cent in September, reports Statistics Canada. Multi-family dwelling and industrial were the only segments to show growth as permit values dipped to $11.2 billion.
Despite recent headwinds, the total monthly value of residential permits had a good September, rising 4.3 per cent to hit $7.2 billion. Leading the charge was a 37.2 per cent monthly increase in construction intentions in British Columbia. The CMAs of Vancouver, Kelowna and Victoria together made up 77.3 per cent of the value of residential permits and 79.9 per cent of the number of new dwellings authorized for the province that month.
Across Canada, 21,700 new dwelling units were authorized through building permits in September, 5.6 per cent more than August 2023 and 2.3 per cent more than September of 2022.
The monthly news on the non-residential side was not as rosy, although values remained significantly ahead of the previous September. The total monthly value of non-residential permits fell 21 per cent from August to $4 billion in September. This drop was mainly attributed to the decline in construction intentions for the institutional component, which fell by 50.7 per cent to settle at $1.0 billion. That component posted a record high of $2.1 billion in August when permits issued were issued for several high valued construction projects.
Despite the sharp month-over-month decline, the total value of non-residential building permits in September 2023 was still 18.7 per cent higher than September 2022. According to Statistics Canada, construction intentions in the non-residential sector have been steadily trending upwards over the course of the past 12 months. This trend also holds true on a constant dollar basis, which removes the impact of changes in construction costs on the value of building permits.