Business

Building permits drop sharply

The value of building permits issued by municipalities unexpectedly fell in January, Statistics Canada reported Monday.

The value of building permits issued by municipalities unexpectedly fell in January, Statistics Canada reported Monday.

The federal agency said permits fell by 5.1 per cent to $5.4 billion. That compared with the 0.5 per cent rise that economists had expected.

Lower construction intentions, particularly for the residential sector in Ontario and the non-residential sector in Alberta and British Columbia, were behind the decline. 

Overall, the value of permits in the non-residential sector fell 13.3 per cent to $1.7 billion, a third consecutive monthly decline and the lowest level since February 2009. 

In the residential sector, the value of permits edged down 0.9 per cent to $3.7 billion, following a 19.6 per cent increase in December.

Analysts are expecting more soft news for housing this week, when Canada Mortgage and Housing releases the numbers on housing starts for February on Tuesday, and on Thursday, when Statistics Canada  releases its new home price index for January.

"By a number of measures, the Canadian housing market is at cycle tops and we think it will moderate throughout 2011," said economist Gorica Djeric of Scotia Capital. 

"I think a downward adjustment needs to take place to bring fundamentals back to sustainable levels."

Corrections

  • An earlier version of this story said Statistics Canada releases data on housing starts. In fact, Canada Mortgage and Housing releases those numbers.
    Mar 07, 2011 1:04 AM ET

With files from The Canadian Press