Permit statistics (the latest of which were released today by Statistics Canada) provide a peak into where spending on the construction of residential and non-residential buildings is headed.

They can, however, be very volatile on a month-over-month basis with a major project or two causing large spikes. For this reason, we focus on the year-to-date (YTD) trends (in this instance, the period from January to July).

When we do this, we find that the real* YTD value of permits for residential buildings in Alberta was a solid 33% higher this year than last year. The increase comes after a YTD decline of 12% in 2023 and 4% in 2022.

The YTD value of multi-dwelling projects was up by 39% compared to 28% for single-dwelling units.

The strong performance in the residential sector has not been matched by non-residential construction intentions which were down slightly by 1% YTD.

It was the largest component of the non-residential sector—commercial buildings—that was responsible for the overall pullback with its YTD permit value down by 11%. The industrial component, meanwhile, grew by 36% and the institutional and governmental component by 6%.

The growth in residential permit value reflects the construction sector’s efforts to keep up with the demand generated by Alberta’s strong population growth. We can also see this in the statistics on the number of dwelling units created which show a YTD increase in 2024 of 27% for single-dwelling units and 48% for multi-dwelling units. Another data point highlighting the surge in residential construction is the fact that housing starts in Alberta hit a nine-year high in July.

On the non-residential side, high borrowing costs and flagging consumer spending are likely weighing on the new construction intentions of commercial operators.

*The data in today’s Twenty-Four have been adjusted by Statistics Canada for inflation in the building construction sector.

Answer to the previous trivia question: Liquified natural gas (LNG) is natural gas that has been cooled to –260° F (–162° C), changing it from a gas into a liquid that is 1/600th of its original volume.

Today’s trivia question: Friday the 13ths only happen when the month starts on which day?