- Prior month -3.9% (were expecting -1.7%) revised to -5.0%
- Building permits tumbled -14.0% in December to $9.2 billion. The decline was the lowest since October 2020
- Declines were recorded in both residential and nonresidential sectors
- On a constant dollar basis a total value of building permits fell -14.2% to $5.8 billion in December
Highlights or Lowlights from the sharp decline:
Residential:
- Total value of residential permits decreased by 17.9% to $5.7 billion in December.
- Significant drop in multi-unit construction intentions by 31.1%, amounting to a $1.3 billion decrease, marking the largest monthly drop in the series.
- Ontario experienced a 45.2% decline in the value of multi-unit permits, contributing to the overall monthly decrease in the residential sector, with a loss of $816.8 million.
- Construction intentions for single-family dwellings slightly increased by 0.8% to $2.9 billion in December.
- Alberta saw a notable gain of 15.3% or $84.4 million in single-family dwelling construction intentions, offsetting declines in seven provinces. This marked a fifth consecutive monthly increase for Alberta and the largest monthly value since January 2014.
Non-Residential:
- Non-residential sector permits value decreased by 7.0% to $3.6 billion in December.
- A significant decline in new major institutional construction intentions, particularly in Quebec (-55.8%; -$313.9 million), led to the overall drop.
- Despite the decline, there were gains in the commercial (+4.1%; +$69.1 million) and industrial (+4.7%; +$39.3 million) sectors across Canada.
- The substantial decline in Quebec is linked to the absence of new major institutional permits in December, following the issuance of two projects over $150 million each in November.
For the 4th Quarter:
- Fourth quarter of 2023 saw the weakest quarterly aggregates since Q3 2021, with a total building permit value of $31.3 billion, a 9.0% decrease from the previous quarter and a 1.7% decrease from Q4 2022.
- Both non-residential and residential building permit values declined from Q3 to Q4 2023, with non-residential permits down 13.3% to $11.6 billion and residential permits down 6.3% to $19.7 billion.
- The single-family dwellings component was the only one to see a quarterly increase, rising 1.4% to $8.5 billion in Q4 2023, following a 9.8% increase in Q3.
- There was also a 2.9% increase in dwelling units authorized for single-family dwellings across Canada in Q4.
- Alberta experienced significant growth in single-family dwelling permits, with a 23.4% increase to $1.7 billion in Q4, marking the third consecutive quarterly rise. New dwelling units issued in Alberta also grew by 21.9% to 4,000 units in Q4, marking the third consecutive quarterly increase.
When you get a sharp decline like this understand that there can be large swings in the series, and permits can be influenced by things like weather, but also higher rates. Nevertheless, looking at the chart above, the swings can be quick and sharp. Nevertheless it is still a shock.
The USDCAD is continuing to stall near the highs for the year, and below the 100 day MA at 1.3556. Sellers are leaning but not wandering far from the previous highs.
