Canada: Housing Starts in Q2 hint at a negative contribution from construction – NFB

In Canada, Housing starts rose from 195.5K in May to 211.7K in June. Kyle Dahms, an analyst at National Bank of Canada point out starts were elevated but this may be due to some artificial given pent-up construction because of closures.

Key Quotes:

“Housing starts were stronger than expected for a third month in a row. The surge in construction in June can be attributed to Ontario, where starts bounced after falling below their historical average in May.”

“June represents a first snapshot of the post-lockdown residential construction industry and overall the numbers are good as starts reached their second highest level of 2020. Looking at the quarterly perspective, after having increased in the first quarter of the year, it should come as no surprise that housing starts declined in Q2.”

“The level of starts observed in the last month were elevated but this may be artificial given pent-up construction due to closures and it remains to be seen if this can be sustained in the current economic context. The combined effect of joblessness and reduced immigration could taper demand for new construction.”