Inflation-adjusted building permit value lower than a year ago
The constant dollar value of building permits over the first three months of 2023 was 7.6% lower than the same period in 2022
By Rob Roach, ATB Economics 11 May 2023 1 min read
The seasonally-adjusted value of building permits in Alberta held steady in March at about $1.23 billion from February and was slightly above (1.4%) where it was 12 months earlier.
First quarter permits were also roughly unchanged (-0.6%) from the same quarter last year.
However, adjusting for inflation in the construction sector,* the constant dollar value of building permits (a.k.a. real value) over the first three months of 2023 was 7.6% ($186.2 million) lower than the same period in 2022.
Real residential building permits were down by 6.9% ($95.7 million) in the first quarter compared to a year ago.
A rise in the inflation-adjusted permit value for multiple dwelling buildings of 31.5% ($155.5 million) was more than offset by a fall in the value of single dwelling permits, which were down by 28.2% ($251.2 million).
It was also a mixed story within the non-residential sector.
Total non-residential permit value in Alberta was down by 8.5% ($90.5 million) in real terms in the first quarter of 2023 compared to the same quarter in 2022.
The decline was due to a pullback in inflation-adjusted institutional and government sector permit value, which fell by 46.4% ($121.2 million), and a 2.0% drop ($14.3 million) in commercial permit value.
Real industrial building permit value, meanwhile, was up by 47.1% ($45.0 million).
Nationally, inflation-adjusted permit value between the first quarter of 2022 and the first quarter of 2023 was down by 15.0% and provides context for the month-over-month jump in real permit value of 12.2% in March linked to a number of high-value non-residential projects such as a new cathode active materials facility in Quebec.
Inflation-adjusted residential permits in Canada were off by 21.6% while non-residential permits fell by 5.0%.
*Monthly estimates for constant dollars are calculated using quarterly deflators from the Building Construction Price Index (Statistics Canada Table 18-10-0135-01).
Answer to the previous trivia question: According to Newfoundland and Labrador’s Department of Industry, Energy and Technology, the first major discovery of oil off the coast of Newfoundland and Labrador happened in 1979 with the drilling of the Hibernia P-15 well.
Today’s trivia question: What are cathode active materials used for?