Building permit values drop 7% in December, rise in 2022 – but only due to price increases
The total value of building permits issued across the country dropped by more than 7% in December. Declines were posted in both the residential and the non-residential sectors.
The total value of residential permits declined 8.4% to $6.5 billion.
Intentions in the single-family homes component dropped 3.9% while multi-family permit values fell 11.6%, with seven provinces posting declines.
The total value of non-residential permits, meanwhile, declined 5.3% to $3.8 billion in December. Decreases posted in Ontario more than offset gains posted in seven provinces.
Construction intentions in the industrial sector decreased 23.4% in December, following a record high in November. The value of commercial permits edged up 2.2%, with seven provinces posting increases.
Finally the total value of institutional building permits posted modest growth (+0.9%). Large losses in Ontario (-30.1%) were offset by notable gains in Quebec (+45.1%), Manitoba (+228.6%) and Saskatchewan (+333.8%). The strong performances in the latter two provinces were driven by building permits for new hospital construction.
Annual review 2022: adjusted permit values decline
The total current dollar value of building permits reached a new record in 2022, increasing 6.8%.
However, says Statistics Canada, that annual increase was largely the result of inflated valuations from persistent material and labour cost increases. On a constant dollar basis, the total value of building permits actually declined – by 6.6% to $83.0 billion.
After three consecutive yearly increases, construction intentions in the residential sector declined 12.3% on a constant-dollar basis – to $50.9 billion. Decreases in the value of single-family permits (-15.5%) outpaced the decline in multi-family permits (-9.6%) in 2022.
Over the last 10 years, residential construction intentions have shifted away from single-family buildings, which composed of 58.8% of the value of residential building permits in 2012, compared with 43.6% in 2022.
The non-residential sector was up 4.1% to $32.0 billion in 2022 – again on a constant-dollar basis. Despite a second consecutive yearly increase, the sector remains below pre-COVID-19 pandemic levels ($34.6 billion in 2019).
Much of the increase was due to the industrial component, which increased by 20.1%. This was led by 10 industrial permits valued over $100 million throughout the year, including a $425-million permit in November for a manufacturing facility in Toronto.
Despite the largest building permit of the year being worth almost $1.5 billion for a new hospital in Vancouver, the institutional component increased by just 3.0%.
The commercial component posted a marginal decline of 0.7% on an annual basis.