By Robb M. Stewart


OTTAWA--Canadian building permits pulled back sharply in March, eating into the modest rebound seen for the quarter that was led by a jump in commercial construction intentions.

The total value of building permits declined 11.7% from the month before to a seasonally adjusted 10.53 billion Canadian dollars, the equivalent of $7.70 billion, Statistics Canada said Monday.

The pullback was sharper than the 4.3% drop expected for the month by economists, according to TD Securities, and follows a 9.3% rise in the value of permits in February.

On a year-over-year basis, the overall value of permits issued in March was down 15.2%.

Still, over the first quarter of the year the value of building permits was up 3.7% from the quarter before at roughly C$33.4 billion. It comes after weakness in the fourth quarter of last year that marked the lowest quarterly total since the third quarter of 2021, Statistics Canada said.

Building permits provide an early indication of construction activity in Canada and are based on a survey of 2,400 municipalities, representing 95% of the country's population. The issuance of a permit doesn't guarantee that construction is imminent.

Housing starts dropped by 7% in March, and the six-month trend is for a 1.6% decline, data released by Canada Mortgage and Housing Corp. showed. The national housing agency has forecast starts will fall this year after reaching historically high levels in recent years, given the lagging impact of higher interest rates on new construction.

For March, the value of building permits was 16.7% lower than the month before at C$4.0 billion, the data agency said.

Construction intentions in the residential sector also retreated, with permits down 8.3% at C$6.53 billion, the agency said. Intentions to build multifamily dwellings fell 9.%, while intentions for single-family homes were 7.4% lower.

For the quarter, the value of residential building permits edged up 1.8%, with growth in multi-unit intentions partially offset by declines in the single-family homes component. Intentions in the non-residential sector increased 6.9%, led by plans for commercial building, which posted the highest level of the past four quarters, due to growth in permits for office buildings.


Write to Robb M. Stewart at robb.stewart@wsj.com


(END) Dow Jones Newswires

05-13-24 0900ET