INDUSTRY PULSE: Construction market expected to heat up

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OTTAWA, Ont. — Construction activity could intensify in the coming months, according to Statistics Canada, as the value of building permits issued by municipalities hit its third highest level on record in February.

Across-the-board increases in every component of both residential and non-residential sectors fuelled a 13.5% surge in permits to $5.06 billion. This followed an 11.1% decline in January.

It was the third time in the last four months that permits surpassed the $5-billion mark. February’s monthly total was only lower than June 2004 ($5.31 billion) and November 2004 ($5.08 billion). The value of building permits is considered an early indicator of construction activity.

On the residential side, housing intentions rose 11.8% to $3.4 billion, the fourth monthly gain in the last five months. This level was just 1.4% short of the record high reached last June. Both single- and multi-family intentions recorded strong gains.

On the non-residential side, the value of permits hit $1.7 billion, a 17.1% rebound from a 17.8% drop in January. All three components (commercial, industrial and institutional) were behind the strong showing. The value of non-residential permits has been on an upward trend since March 2004.

On a year-to-date basis, the value of overall construction intentions hit $9.5 billion, 12.8% higher than the total for the first two months of 2004, which was a record year. Residential intentions were up 13.4% and non-residential up 11.5%.

Among metropolitan areas, Toronto and Edmonton began 2005 strongly. In Toronto, a buoyant demand for new multi-family dwellings drove the increase. In Edmonton, the gain was spread across the various categories of residential and non-residential buildings. However, the gain shown in the country-wide cumulative value of building permits came largely from non-metropolitan areas.

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