Homebuilders show strength in Canada, buffer weakening economy
Canadian housing starts remained at elevated levels in February, amid strength in the detached-home market.
Work began on an annualized 210,069 units, Canada Mortgage and Housing Corp. said in a statement Monday. While that's down 1.9% from January, it beat economist expectations for a 207,000 increase.
The numbers suggest relatively robust levels of new construction activity, and are consistent with what has been a clear recovery in demand in some of the nation's largest housing markets. That's good news for a Canadian economy that will increasingly rely on housing to generate growth this year, amid worries about a global economic slowdown.
"With household formation still solid and interest rates now much lower, the housing market is one area of the economy which should be more resilient to the slowdown we now anticipate based on recent global developments," Andrew Grantham, an economist at CIBC World Markets, said in a note to investors.
Among major cities, Vancouver led gains with a 56% increase in February. Montreal and Toronto pared back recent increases, with both cities recording declines during the month. Overall, Canada recorded a 6.1% drop in multiple urban starts during the month, while single-detached starts rose 11.9%.
Separately, Statistics Canada reported the value of building permits in January rose 4%, more evidence of strength in the sector.