* Building permit value soars 17.2 pct in March
* Permits issued for multifamily dwellings double
* Residential permits hit highest level in 12 months
* Ivey seasonally adjusted index at 57.8, down from 73.2
By Solarina Ho
TORONTO, May 5 Canadian economic data flashed
mixed signals on Thursday as the value of Canadian building
permits issued in March soared past expectations, but
purchasing activity in April fell short of forecasts.
Building permit value jumped 17.2 percent from February to
the highest level in almost four years as permits issued for
multifamily dwellings, mainly condominiums, more than doubled,
Statistics Canada said. [ID:nN0796933]
Analysts in a Reuters poll had predicted a 4.0 percent
slide in March following February's surprise 9.8 percent jump.
"While the headline is a positive, the details are more
mixed, suggesting that these gains may not continue into
April," said Derek Holt, vice president of economics at Scotia
Capital, in a research note.
Residential permits soared 33.9 percent as municipalities
approved C$1.9 billion ($2.0 billion) in permits for
condominiums and apartments after two straight months of
declines. Permits issued for single-family homes rose 2.5
The residential permit gain suggested there could be a rise
in April housing starts data to be released on Monday, Holt
"Given that almost all of the growth in the residential
sector was in the multiples component, this could be a last
effort by consumers to get in before the tighter mortgage
regulations come into effect, suggesting that the gain may be
temporary," he said.
There was a 0.4 percent slide from February in
nonresidential sector as fewer permits were issued for
industrial and commercial buildings, offsetting record high
permits for institutional buildings.
Compared with a year earlier, total building permits were
up 9.7 percent, with residential permits down 1.4 percent and
nonresidential permits up 30.3 percent.
Analysts said the data could herald a rise in employment in
the construction sector, which could give Friday's April
employment report a lift.
IVEY DROPS SHARPLY
Less bullish for the economy, the Ivey Purchasing Managers
Index -- which measures purchasing activity in the Canadian
economy -- fell to 57.8 in April on a seasonally adjusted basis
from 73.2 in March, a record high for the month. The unadjusted
index was 57.7, down from 73.2.
Analysts largely expected a decline following supply
constraints from Japan after the devastating earthquake and
tsunami in March, but the figures still came in much lower than
the forecast unadjusted reading of 65 and the forecast 65.5
seasonally adjusted reading.
"Ivey PMI collapsed from March's reading ... And while this
frustrated street forecasts looking for a more moderate decline
... it is nonetheless in keeping with the seasonal norms for
the number set," HSBC market strategist Stewart Hall said in a
A reading of 50 indicates that activity remained flat from
the preceding month, while a higher reading indicates an
increase and a lower reading reflects a slowing or decrease.
The index, a joint project of the Purchasing Management
Association of Canada and the Richard Ivey School of Business,
also showed that the employment index dropped to 55 from 58 in
March. A Reuters survey of analysts has forecast that April's
unemployment rate, to be released on Friday, remained
"There is a tendency for foreign participants in the
Canadian market space to attach a level of gravitas to the Ivey
that is unwarranted by the narrow nature of the survey," Hall
"From a practical standpoint, the Ivey index has not
provided a lot of good guidance in terms of economic
(Reporting by Howaida Sorour, Louise Egan and Solarina Ho;
editing by Peter Galloway)