Canadian building permits drop

Paul sent in this link to an article in the Globe and Mail about Decembers unexpected drop in building permits across Canada. Economists had been expecting a drop of about 2 percent, but permits actually pulled back 7.8 percent.

Most experts expect construction activity to ease from last year's 2006 blistering pace amid higher mortgage costs, though overall activity is expected to remain strong.

“The data is in line with our view that the residential sector is likely to continue to cool...although only modestly in 2007,” wrote Dawn Desjardins, senior economist at Royal Bank of Canada, adding that “non-residential investment will continue at a solid clip backed by firm corporate balance sheets and decent profits.”

The article points out that last year saw a huge number of permits in western canada, so it will be interesting to see what happens when the record number of projects under construction complete in the next year or two.