The construction industry ended the year on a strong note in December, as builders took out $4.6 billion worth of building permits, up 12.8% from November and the highest figure over the last five months, Statistics Canada reported this morning.

The increase was much stronger than expected by markets, RBC Financial reports.

“On the residential side, permits rose 6.6% from November as the value of activity reached a new monthly peak of $2.95 billion, surpassing the old record of $2.91 billion registered in September,” RBC says. “The positive results extended to the non-residential side in December, with a substantial 26.2% increase in permits from the month before. This, however, just barely reverses the aggregate declines seen in the two previous months.”

“December’s strong results caps off a record year for construction activity in Canada as the value of building permits jumped past the $50 billion mark for the first time ever, surpassing the previous record set just the year before,” RBC says. “Permits in the housing sector rose 8.3% for the year, with the values surpassing the previous record set the year before, while the non-residential construction intentions hit a peak of $18.8 billion, up 6.3% from the year before.”

“Today’s permits numbers confirmed what we already know, 2003 was a banner year for the construction sector. Certainly, December’s strong finish suggests that activity will be just as strong in the opening months of this year,” RBC predicts.

However, it warns that caution is warranted “as permit activity is a very volatile number”. And, the harsh winter weather may limit construction. “Nevertheless, the low interest rate environment being supported by the Bank of Canada, along with a lack of housing inventory in some markets across Canada, continues to point to very healthy housing activity this year, though perhaps not the record-breaking activity we saw last year,” it concludes.