Municipalities throughout Alberta issued a total of $1.71 billion in building permits in July, essentially unchanged from June. The figure is adjusted for seasonality. The all-time record for the province was set in May 2007 with $1.84 billion in building permits issued. Since then, the total has exceeded $1.7 billion only three times—two of those times being in June and July of this summer.
Building permits are a good sign of future activity—what economists call “leading indicators”—because permits must be secured in advance of any construction activity taking place. Residential permits were up 9 per cent from June to $933 million. Over the last twelve months, residential permits are 15 per cent compared to the previous twelve month period. That reflects solid income and labour markets, a growing population and plenty of demand for new houses and condos.
Non-residential permits slipped to $780 million in July, essentially offsetting the increase in residential permits. However even with this dip, non-residential building activity is certain to remain a strong driver of the economy in 2015. Institutional and government building projects—largely made up of transportation infrastructure, schools, and hospitals—more than doubled in July to $143 million. Commercial projects fell a bit while industrial projects were unchanged.