Most of the pickup is occurring in industrial building construction, where activity is booming. Commercial real estate remains in a difficult spot, with very high vacancy rates discouraging new construction in much of the country.
After today’s release it is clear that there remains little slack in the labour market. Slower more sustainable job growth is in store for the year ahead.
Both commercial and industrial building permits contributed to the growth this month, indicating that recent investment gains are being sustained. However, there are significant regional differences in building permits, with double-digit growth rates in Ontario and Quebec but declines in the Prairie provinces.
With the economy growing in step with the Bank’s forecast, economic capacity rapidly diminishing, and an acceleration in wage growth, we expect that the Bank will continue to gradually increase interest rates throughout next year.
Although October’s trade numbers are encouraging, the trade sector will not an be an engine of growth for the Canadian economy as it has been over the past few years.
After years of weak investment, it seems firms are finally confident enough to pull the trigger on spending. While consumption is expected to weaken as consumers battle higher debt loads, the strong labour market is supportive of continued, albeit softer, spending growth.
With a surplus in their back pocket, the Ontario government felt the time was ripe for a sprinkling of election-friendly announcements including a cut to the small business tax rate and an assortment of minor program spending increases.