Canada’s housing starts accelerated to a seven-month high last month as the construction industry continued recovering from the winter-induced lull.
The Canada Mortgage & Housing Corp announced that builders broke ground for a seasonally-adjusted 198,324 homes in May, up from 196,687 last month. The average number of housing starts in the first quarter was 174,984 homes.
Economists in a Bloomberg survey had forecasted the starts to read at 185,000 on average.
“After what were probably weather-related interruptions over Q1 during a worse than average winter for many regions of the country, the average pace of homebuilding activity is on the mend,” Bloomberg quoted Derek Holt, a vice president of Scotiabank Economics, as saying. “Housing should therefore contribute positively to GDP growth in the April-June quarter”.
Statistics Canada said last month that a decline in construction activity weighed on the growth of the gross domestic product in the first quarter. Home construction posted the steepest slump since the financial meltdown.
Starts for stand-alone houses in urban areas increased the most, growing to an annualized 63,204 in May up from 59,845 in April. Starts for multiple units declined from 118,640 to 117,709 over the period.
“Builders are expected to continue to manage their starts activity in order to ensure that demand from buyers seeking new units is first channeled toward unsold completed units or unsold units that are currently under construction,” said Bruno Duhamel, the head of housing and economic analysis at CHMC.
The Canadian dollar rose 0.1 percent to trade at C$1.0917 for a U.S. dollar in midmorning trading in Toronto after the data was released. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter
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