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Building permits continue their downward trend

Building permits continue their downward trend

Posted on: 3/7/2019 | Author: ATB Financial's Economics + Research Team

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The latest statistics on builders’ intentions reflect both an economy struggling to find traction and an excess supply of real estate on the market.

In January, building permits for both residential and non-residential projects totaled $1.028 billion in Alberta, down by eight per cent from December and lower than last year’s average by almost nine per cent. January’s permit numbers are seasonally adjusted and take into account seasonal fluctuations that take place in the construction cycle throughout the year.

Both residential and non-residential permits have been trending lower since last spring. In January, non-residential intentions (commercial, industrial, and governmental buildings) reached $424 million. All categories declined from December to January, but much of the decline was felt in the industrial category (-49.3 per cent, month-over-month).

Residential permits grew close to 2 per cent from the end of last year, totalling $604 million, but are still down 12 per cent on an annual basis.

Building permits are an excellent forward looking indicator for construction activity. The current drop in permits is the result of increasing supplies in light of softening demand. The latest building permit numbers showcase weaker construction levels and are a reflection of slower economic growth in the province overall.

Building Permits, graph

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