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Construction poised to slow in 2018

Construction poised to slow in 2018

Posted on: 2/7/2018 | Author: ATB Financial's Economics + Research Team

​​Statistics Canada's final set of building permit data for 2017 points to a slowing construction sector in Alberta this year. The total value of permits issued by cities and towns in the province in December equalled $1.1 billion, an 11 per cent drop from November.

The non-residential sector saw a 32 per cent reduction in permits from November to December. This is not surprising considering the number of commercial projects that have either already started or are nearing completion in Edmonton and Calgary. Compared to last year, however, permits within the non-residential sector are up two per cent.

The residential sector, as a whole, totalled $750 million at the end of last year. Permits increased 6.3 per cent from November and close to 63 per cent from last December. Despite increased levels of provincial out-migration, falling wages, and a high unemployment rate in the province throughout 2017, Alberta’s housing sector continued to impress.

This surprising growth could come to an end in 2018. Interest rates have started to rise and the number of houses sitting vacant has been growing significantly from last year.

Having experienced a strong residential sector last year, and with many new commercial projects on the market, construction activity in the province is expected to be softer this year.

Building permits, Alberta, graph​ ​ ​

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