Canadian building permits remained relatively strong in July, offering critical economic support. Building permits slipped just 0.1% in July to $3.4 billion, slightly below expectations of a small rise.

BMO Nesbitt Burns says that, “While this is the first decline since March, the report revealed underlying strength as June was revised upward to 2.8% from the initial reading of 0.2%. Year-to-date, permits issued total $23.5 billion, up 13% from last year and the highest in over a decade.”

The weakness came thanks to residential permits, which fell by 10.2% in the month. The multi-family dwelling permits, which are notoriously volatile, were the reason for the slide. The more important single-family dwellings rose by 0.6%.

Non-residential permits rose for the first time since April, thanks to strong commercial activity, especially in Ontario. “Non-residential permits have been up on a year-over-year basis since January, and the total for the first seven months of the year is the highest in over a decade,” observes BMO.

The brokerage firm notes that this is one of several positive data releases this week. “We have seen other signs that the domestic economy is not overly weak,” it notes. “Indeed, department store sales flared up 3.3% in July from the prior month — the biggest gain since January. As well, motor vehicle sales dipped just 1.2% in August from very strong levels a year ago, and look to have edged up from the prior month on a seasonally adjusted basis. Building permits remain healthy, the strongest since the boom levels of the late 1980s. The construction sector remains a bright spot for the economy, and the ongoing slide in interest rates will provide additional support.”