Building permit data came in much stronger than expected for January, up 17.4% overall, and up 24.6% in the residential market.

“Today’s building permits figure certainly deserves a nomination for its supporting role in the Canadian economic recovery picture,” says BMO Nesbitt Burns, noting that this was the biggest monthly gain in a year and that it blew away consensus expectations.

“So what is fuelling this construction fire? The lowest interest rates in a generation, good home affordability levels, and healthy wage growth. Canadian consumers have proven time again their resiliency, and will continue to play a key role in this year’s economic recovery efforts,” says BMO.

“The outstanding performance of Canadian building permits in January further supports the view that the economic recovery is underway, led by the booming housing industry,” it concludes.