The following was written by ICBA Chief Economist Jock Finlayson.
BRITISH COLUMBIA – In the waning weeks of 2023, Canadian building permits turned lower, consistent with a stagnant national economy and suggesting a weak hand-off for 2024. Nationally, the value of building permits fell almost 4% between October and November, reaching $10.9 billion in the latter month. All building types – residential, commercial, industrial and institutional — recorded declines.
BC experienced a second consecutive monthly drop in total permit values. Lower residential permit values were partly offset by a modest uptick in non-residential permits in November. On a year-over-year basis, total permit values were down by 16.1%.
Unlike BC, Alberta recorded higher residential permit values in November, but non-residential permits fell slightly. And, in contrast to both BC and Canada as a whole, total permit values in Alberta were up strongly on a year-over-year basis.
Looking to the major cities in the two provinces, Vancouver had a 11.3% monthly contraction in permits in November while Calgary saw a 14.5% drop and Edmonton boasted an outsized 25% month-to-month gain. On a year-over-year basis, total permit values were 27.5% lower in Metro Vancouver, 5.3% higher in Calgary, and up by 44% in Edmonton.
As for 2024, building permits at the national level are likely to feel the effects of a further slowing of the Canadian economy – although continued brisk population growth and rising public sector capital spending will provide some support to building activity. Alberta is expected to handily outpace BC in overall economic growth this year, and this disparity should be reflected in the building permit data over the coming months.