UPDATE 1-Canada Feb building permits up 1.7 pct as housing softens

Tue Apr 9, 2013 8:36am EDT

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* Permits increase by 1.7 pct in Feb vs forecast of 4.3 pct gain

* Permits for housing fall 7.2 pct; non-residential up 18.9 pct

OTTAWA, April 9 (Reuters) - The value of Canadian building permits rose by a weaker-than-expected 1.7 percent in February as a sharp decline in plans for multi-family housing partially offset strength in other types of residential and non-residential projects, Statistics Canada said on Tuesday.

The increase followed a 1.8 percent gain in January and was below the 4.3 percent gain forecast by market players for February. It reflected a 18.9 percent jump in permits for the non-residential sector and a 7.2 percent drop in the residential sector.

In line with a softening trend in the once-hot housing market since mid-2012, construction intentions for multi-family housing fell 19.1 percent in February, the seventh decrease in eight months. Most of the weakness was in Ontario, British Columbia and New Brunswick, Statscan said.

Plans for single-family houses rose a tepid 1.1 percent. Municipalities approved of 14,071 new residential buildings in February, down 12 percent from January.

Housing, which slowed but did not crash during the global financial crisis, helped sustain Canada's economy through much of the recovery but is now starting to slide just as the U.S. housing sector has begun a clear recovery.

Analysts in a Reuters poll earlier this year predicted the pace of homebuilding would drop by nearly a fifth in 2013.

In the non-residential sector, permits rose solidly for the commercial, institutional and industrial components.

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