Canada's record-setting pace of construction came to a sharp halt in February, according to Statistics Canada, which said the value of building permits plunged to its lowest level in a year.
The government agency reported Wednesday that municipalities issued $4.9 billion worth of permits in February, down 22.4 per cent from January.
The level was 12 per cent lower than last year's monthly average, and the lowest since February 2006.
"February's decline, the fastest in 13 months, occurred due to across-the-board decreases in both residential and non-residential sectors," Statistics Canada reported.
All provinces but Manitoba expected a decline in their construction schedule, with six of them registering double-digit percentage declines.
"Prior to February, intentions have been strong in recent months, thanks mainly to soaring demand for residential and non-residential space in Western Canada."
February's decline included drops in both the residential and non-residential sectors, Statistics Canada reported.
Residential sector
Permit values fell 17.8 per cent to $3.0 billion in the residential sector, the lowest level since March 2005.
The housing sector saw intentions cool off in February because of an abrupt decline in multi-family dwelling permits, StatsCan said.
The value of multi-family permits declined 34.4 per cent to $824 million, the lowest value in 13 months and the second lowest since December 2004.
Municipalities approved only 7,120 multi-family units, down 27.4 per cent, the lowest level in just over a year.
Meanwhile, the value of single-family permits fell 9.0 per cent to $2.2 billion after a record high the month before. This was the lowest level in eight months.
Municipalities approved 9,160 single-family units, down 7.3 per cent from January, and 7.7 per cent below the average for 2006.
The residential sector has seen the number of approved units decline since August 2006.
The trend had seen almost uninterrupted growth since the beginning of 2005 until August.
"However, several factors could still prop up the demand for housing, including strong employment growth, increasing disposable income, high consumer confidence, immigration and inter-provincial migration, favourable mortgage rates and low apartment vacancy rates in various centres," the report said.
"On the other hand, the price of new homes continued to increase strongly in Western Canada, and the inventory of unsold new housing has been on the rise since August 2006."
Non-residential sector
In the non-residential sector, the value of permits fell 28.7 per cent to $1.9 billion, the lowest level since April 2006.
February's level was the lowest since April 2006, and 10.6 per cent below the average for 2006.
The largest decline, of 43.9 per cent, occurred in Ontario, which set a record high in January after a 79.0 per cent gain.
The industrial sector saw the biggest decline, with the value of permits plunging 53.3 per cent to $308 million in February, the lowest level since April 2006.
Industrial intentions had been on an upward trend throughout the last year, but they stayed relatively flat over the past three months.
Statistics Canada attributed the decline in the industrial sector to a retreat in construction intentions for Ontario plants.
In the commercial sector, the value of permits fell 20.2 per cent to $1.1 billion, the lowest level since February 2006.
This was largely attributed to lower construction intentions for office buildings.
The decline was distributed among eight provinces, with the largest dollar decreases in Alberta, Quebec and Ontario. In Alberta, the $187-million value of commercial permits hit its lowest rate since September 2005.
In contrast, however, both British Columbia and Manitoba posted gains in commercial permits, namely because of projects for trade and services buildings.
In the institutional sector, the value of permits declined 20.7 per cent to $498 million, following a 71.5 per cent gain in January. This level was 4.3 per cent lower than the monthly average for 2006, which was a banner year for institutional construction projects.
The decrease was attributed to declines in the medical buildings in Ontario and Quebec, and in intentions for British Columbia schools.
The government agency says that despite the showing in February, several factors could prop up non-residential construction intentions.
These include recent strong growth in corporate operating profits, falling vacancy rates for office buildings, intentions among businesses and governments to boost spending in non-residential construction, and continuing advantageous interest rates.
