OTTAWA (Reuters) - Canada’s construction sector showed surprising strength in July, mainly because of a sudden jump in plans for commercial buildings, with housing showing just a modest rise, according to Statistics Canada data released on Monday.
The seasonally adjusted value of building permits issued in July jumped 20.7 percent from June to a record C$7.99 billion ($7.69 billion), far stronger than the 1.0 percent median forecast in a Reuters survey of economists.
Canadian authorities have been monitoring the housing market carefully for signs of a bubble, but the residential component of building permits rose by a relatively tame 4.1 percent, after a 12.8 percent fall in June and a 4.1 percent rise in May. It stood 3.4 percent below levels of a year earlier, with multiple-family buildings up slightly and single-family homes down somewhat more.
The Bank of Canada said last week that while housing had been stronger than anticipated, it was tempered by slower credit growth and higher mortgage rates, pointing to a ”continued constructive evolution of household imbalances.
The value of nonresidential building permits rose by 45.5 percent from the previous month, after a fall of 7.2 percent in June. The commercial component was up 89.2 percent, industrial was up 11.6 percent and institutional was down 6.5 percent. It was the biggest rise in commercial building permits since May 2011.
Reporting by Randall Palmer and Alex Paterson; Editing by Marguerita Choy