Today’s construction data adds more evidence to the argument that Canada is largely resisting the U.S. slowdown say economists at BMO Nesbitt Burns.

“Today’s two economic releases drive home the point that domestic demand continues to roll along in Canada. While manufacturing is getting hammered by the U.S. slowdown, consumer spending and construction are finding heavy-duty support in an environment of low interest rates and steady disposable income gains,” says BMO Nesbitt Burns.

Building permits for April came in at the high end of economists’ expectations, jumping 4.8% in the month. “Sorting through the huge swings in 2001, permits are up a whopping 14% from year-ago levels in the first four months of the year,” it says.

BMO notes that commercial construction “is on fire”, with permits up 16.6% in April, and up 21.2% from year-ago levels so far in 2001. Low office vacancy rates and higher provincial government spending is driving the action. Quebec is leading the way, with permits up 35%.

At the same time, department store sales were also stronger than expected, up 0.6% in April. Sales are up 8.1% from year-ago levels.

All in all, BMO says the numbers show, “More signs that the Canadian economy is holding up well in the face of the U.S. slowdown, particularly on the domestic spending front.”