An ongoing theme of Alberta’s economic story is the need for more housing in the wake of strong population growth.

Even though we expect population growth to moderate, the need for more housing will not go away as it will take time for the supply to catch-up to the demand.

Given the above, it’s encouraging that statistics released yesterday show that both the dollar value of building permits issued in Alberta and the number of new dwellings that will be created are on an upward trend.

The value of residential permits issued in September was 20% higher than the year before while the number of new dwelling units was 28% higher.

Smoothing out month-to-month volatility and removing construction price inflation, the 12-month moving average also shows a strong upward trend in residential permit value (see the chart below).

Although inflation-adjusted permit value (in constant dollars) is lower than it was in 2018,* the number of new dwelling units being created is noticeably higher due to an increase in multi-dwelling projects (see the chart below). The trendline for single-dwelling homes is also up, just not to the same degree as it is for multi-dwelling projects.

In addition to increasing the supply of housing in the province, the construction activity is a source of economic growth.

We expect this activity to continue over the near term due to the abovementioned need to catch-up with the surge in population over the last two years and to keep pace with ongoing, albeit slower, population growth going forward.

*Because the data series starts in 2017, 2018 is as far back as we can go using a 12-month moving average.

Answer to the previous trivia question: Notable protectionist Robert Walpole served as Prime Minister of Great Britain from April 3, 1721 to February 11, 1742.

Today’s trivia question: What is Alberta's official fish?