Building permits jump 11% in March as non-residential values reach a record level
The value of building permits jumped by 11% in March, reaching $11.8 billion on the strength of a new record high in the non-residential sector.
The total monthly value of non-residential permits increased by 32% to a new high of $5.2 billion, with municipalities issuing 10 separate permits valued at $100 million or more.
The largest project of the month was the $570 million new General Motors and POSCO Chemical cathode active materials facility in Bécancour, Quebec, 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, for which further major investments in industrial projects are anticipated.
Commercial (+41.5%) and institutional (+29.5%) construction intentions also posted significant monthly gains.
Residential construction intentions stall
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 sharply increase with strong construction intentions (values up +30.9% or + $321.9 million) in March, concentrated in metropolitan high-rise multi-dwelling developments. The four Atlantic provinces collectively also had notable monthly gains in multi-dwelling (+40.6% or +$48.1 million) and total residential (+14.0% or +$39.5 million) permit values.
These gains were nationally offset by declines in five provinces. Ontario (-8.1% or -$246.6 million) weighed down the sector the most, while Saskatchewan (-27.0% or -$12.7 million) posted the largest proportional decline of the month.
First quarter of 2023 ticks upward, led by non-residential building permits
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, the first reprieve since initial hikes started in March 2022.
However, this signalling 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.