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B.C. building permits hold steady

December provincial building permits matched values reached in November, contributing to a modest upward trend to end the year. Permits reached $1.464 billion, which was flat from the previous month and 3.2% higher than same-month 2019.
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December provincial building permits matched values reached in November, contributing to a modest upward trend to end the year.

Permits reached $1.464 billion, which was flat from the previous month and 3.2% higher than same-month 2019. Residential permits pulled back 4.5% to $997.6 million on the heels of a 25% November gain. Non-residential permits rose 11% to 466.5 million on a 52% increase in private-sector building intentions but were offset by a drop in institutional permits. Non-residential activity has generally held range-bound.

Among metro areas, Vancouver-area permits rose nearly 11% on a 39% increase in non-residential activity, while Kelowna permits surged 38% and Victoria permits rose 14%. This suggests a sharp decline outside metro B.C. regions in December.

Nevertheless, building intentions fell 11.3% in 2020 to $16.9 billion – the lowest since 2017. Among metro areas, only Victoria posted growth. Provincial residential permits declined 9.5% while non-residential permits fell 15%.

The combination of a weaker housing market in 2019 and slower pre-sale sell-through largely contributed to the residential downturn, which was further amplified by the pandemic. Non-residential weakness likely reflected the pandemic downturn, which led to closures of businesses and a shift to survival mode rather than investment in brick-and-mortar operations. Private-sector declines of more than 20% reflect this, with a partial offset from public investment. Residential intentions are likely to edge higher in 2020, coinciding with steady housing starts, while non-residential permits remain shallow until the second half, when strengthening economic activity and investment appetite increases. Public-sector investment in schools and health facilities should remain supportive.

Active business counts in B.C. rose 1% in October despite a mild increase in closures. There were 124,361 businesses with at least one employee in the province, up 1% from September. Nationally, active business counts rose 0.6%.

With the latest increase, more than half of the loss of active businesses observed from February to May has been recouped. October counts were down 4.9% from February. •

Bryan Yu is chief economist at Central 1 Credit Union.