April building permits soar past forecasts
OTTAWA (Reuters) - A surge in construction plans for multifamily housing and commercial buildings pushed up the value of Canadian building permits in April by 14.5 percent to their highest level since October, Statistics Canada said on Thursday.
Analysts surveyed by Reuters had expected, on average, a gain of just 0.7 percent. Building permits, an early indicator of construction activity, had been on a downward trend since mid-2007 and fell 4.6 percent in March, according to Statscan's revised figures.
Economists say Canada's housing market has avoided a U.S.-style crash.
"From an economic standpoint, it appears that the builder sector is lining up to deliver its fair share of GDP growth," said Stewart Hall, markets strategist at HSBC Canada.
Housing starts in May, due for release on Monday, are expected to be healthy but economists predict the housing market overall will continue to weaken from last year.
Permits issued for housing jumped 13.4 percent thanks to a 39.9 percent jump in apartment and condominium projects.
But single-family homes fell 2.4 percent, a sign that many buyers have been priced out of the market.
"This report does suggest that some improvement in building activity may lie ahead for the Canadian housing sector, however, the fact that all of this increase came from the volatile multi-units component does suggest some give-back in the coming month," said Millan Mulraine, economics strategist at TD Securities.
The province of Ontario -- hard hit by the U.S. economic slowdown because of its reliance on manufacturing and exports -- nonetheless saw the strongest housing growth as multifamily permits rose more than 50 percent to their second highest level on record.
Nonresidential building activity was also strong, with the value of permits rising 16.5 percent. Plans for new hotels and retail stores fueled a 20.2 percent jump in permits for commercial buildings, while industrial and institutional permits showed lower growth.
(Reporting by Louise Egan; Editing by Peter Galloway)
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