Building Permits in Canada Rise to 2nd Highest Ever

Canadian building permits surged unexpectedly to the 2nd highest ever in October, led by multi- family houses and commercial buildings such as hotels and restaurants.

The value of permits issued by municipalities rose 6.1 %, trailing only December 2005's record. Economists expected a 1.5 % drop.

Non-residential permits rose 9.1 % , the 3rd straight increase. The value of proposed housing developments rose 4.3 %.

Increased consumer spending is driving the construction of new businesses as well as new homes, as Canadians benefit from low unemployment and mortgage rates. That supports the Bank of Canada's statement yesterday that rising consumer spending and home prices may offset slower export growth caused by a high dollar and weaker U.S. demand.

The October gain in non-residential permits came entirely from a 37 % jump in commercial projects such as hotels and recreational buildings, more than offsetting declines in industrial and government buildings.