The pace of new home construction picked up in February compared with January, the Canada Mortgage and Housing Corp. said Thursday.
The agency said the seasonally adjusted annual rate increased to 229,737 units in February, up from 215,260 in January.
Economists had expected the rate to come in at 216,600, according to Thomson Reuters. Housing starts are considered a leading indicator—an early sign of how the economy is performing.
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The overall increase came as the seasonally adjusted annual rate of urban starts increased by 7.1% in February to 211,211 units.
“Starts likely benefited from the more favourable weather conditions during the month, but are now running ahead of what would be expected given recent readings on building permits,” said Royce Mendes, senior economist at CIBC World Markets, in a research note. The seasonal adjustment also tends to boost readings in the winter months, he added.
“As a result, today’s consensus-topping reading doesn’t do much to change our forecast that residential building activity will cool somewhat in 2018,” the note said.
Multiple urban starts increased 15% to 154,535 units while single-detached urban starts fell 9.8% to 56,676 units. Rural starts were estimated at a seasonally adjusted annual rate of 18,526 units.
The six-month moving average of the monthly seasonally adjusted annual rates of housing starts was 225,276 units in February compared with 224,572 in January.
Meanwhile, Statistics Canada reported that municipalities issued $8.4 billion in building permits in January, up 5.6% from December.
The increase was due in large part to permits for multi-family dwellings in Ontario that rose 71% or $404.3 million to $974 million in January, more than offsetting the 39.7% drop reported the previous month.
Overall, residential permits climbed 5.9% for the month to $5.32 billion, while commercial building permits gained 8.9% to $1.7 billion and institutional permits increased 19.2% to $834.9 million.
Permits for industrial buildings fell 18.6% to $554.5 million.