Canada May housing starts rise 2.7% from April

08 June 2011 16:28  [Source: ICIS news]

TORONTO (ICIS)--Canadian housing starts rose 2.7% in May from April to an annual rate of 183,600 units, a government housing agency said on Wednesday.

Ottawa-based Canada Mortgage and Housing Corporation (CMHC) said the increase was primarily the result of more starts of multiple-unit construction projects in most provinces, while starts for single units fell.

Urban housing starts rose 0.6% to an annual rate of 161,000 units in May.

British Columbia saw the highest increase in the annual rate of urban housing starts with 33.3%, followed by Quebec with 13.5%. However, Ontario - Canada’s largest province - saw a 22.9% decline in the urban starts rate.

Mathieu Laberge, manager for economics and housing analysis at CHMC, said overall Canada’s housing market is healthy - in both the new housing and the resale market.

Laberge added that Canadian interest rates continue to be low, which provides stimulus for the housing market.

In related news, a government statistics agency said this week that the value of Canadian building permits in April dropped 21.1% to Canadian dollar (C$) 5.3bn ($5.4bn)from March.

Both non-residential and residential sectors declined in April, with Ontario posting the largest decrease.

April's decline in the value of permits came after sequential increases in March and February of 16.8% and 9.8%, respectively.

Canada’s chemicals producers closely follow the housing market, which is a key downstream market for a variety of chemicals, plastics, fibres, paints, coatings, and resins.

($1 = C$0.98)

Read Paul Hodges’ Chemicals and the Economy Blog

By: Stefan Baumgarten
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