Strong construction activity in Ontario drove building permit totals in September to their second-highest level reported since January 2017.

New data from Statistics Canada finds that the total value of permits issued by municipalities for the month increased by $1.3 billion (+11.5%) to reach $13.0 billion. Driving much of the growth was a jump in activity in Ontario, where permit values rose by 25% to reach $5.9 billion.

The total value of non-residential building permits issued across the country increased by $797.5 million (+18.0%) to $5.2 billion in September, driven by gains in the institutional component (+$824.9 million). However, industrial (-$17.6 million) and commercial (-$9.9 million) construction intentions edged down.

With an increase of $502 million, Ontario's institutional component drove national gains, and was itself supported by significant contributions from construction intentions for long-term care facilities across the province and a hospital permit in Prince Edward County.

The total institutional component was also supported by gains in Manitoba (+$99.5 million) and Alberta (+$90.0 million) in September.

Construction intentions for the residential sector, meanwhile, rose by $540.7 million nationally (+7.5%) to reach $7.7 billion. Activity in the multi-unit component (+$505.5 million) led the way, while the single-family component (+$35.1 million) contributed modestly.

Multi-unit construction intentions were driven by Ontario (+$812.3 million), specifically by large multi-unit permits in Toronto, Barrie and Mississauga.

Ontario's industrial construction intentions drive the non-residential sector to a quarterly series high

The total value of building permits issued in the third quarter was $37.0 billion, up by $2.0 billion (+5.6%) from the previous quarter ($35.1 billion). This marked the third consecutive quarterly increase, and the highest quarterly value recorded in the series.

Construction intentions in the non-residential sector grew by $1.9 billion (+14.6%) to an all-time high of $14.6 billion in the third quarter, outpacing the previous record of $13.6 billion reached in the first quarter of 2023.

The most recent quarterly growth was largely attributed to Ontario's non-residential sector (+$1.5 billion), which reported significant gains in the industrial component (+$1.0 billion).

As a result, the total value of industrial building permits reached a national record high of $4.0 billion (+$1.4 billion) in the third quarter, supported by major permits issued in August for a battery plant in St. Thomas, Ontario.

The overall growth in the non-residential sector in the third quarter was also supported by increases in the institutional component (+$590.1 million), but it was tempered by a slight decline in the commercial component (-$89.9 million).

Construction intentions in the residential sector edged up 0.5% (+$101.1 million) to $22.4 billion in the third quarter, representing the slowest growth out of the first three quarters of 2024.

The increase in the third quarter was due to the rise in the single-family home component (+$285.9 million), following two consecutive quarterly declines. Meanwhile, declines in the multi-unit component (-$184.8 million), the first quarterly decline since the start of 2024, moderated the gains in the residential sector.

Despite the decrease in the multi-unit component, it recorded the second highest quarterly level ($14.3 billion) in the third quarter, following the record high of the previous quarter ($14.5 billion). This high level was supported by broad-based growth in the number of permits issued in Quebec and substantial values of permits issued in Ontario.