OTTAWA -- The value of Canadian building permits rose unexpectedly in May -- the second consecutive monthly gain -- as an increase in non-residential construction plans outweighed a drop in the residential sector, Statistics Canada said yesterday.

Permits issued by municipalities rose 1.1 per cent to $6.6 billion during the month, the highest level since October 2007, the federal agency said.

"It was the first back-to-back increase in construction intentions since November 2006, and could point to busy construction sites in the coming months," the agency said.

"The value of building permits has followed an upward trend since the beginning of the year."

In dollar terms, Ontario posted the largest increase, followed by B.C. and New Brunswick. Permits in Ontario rose 3.1 per cent to a value of $2.5 billion. This was primarily driven by a 26.4-per-cent jump in the value of construction intentions for non-residential buildings, said the agency.

In May, the non-residential sector in the province was at its fourth-highest value since January 1989.

Many analysts had expected a decline of as much as six per cent in permits in May, given the recent softening in the housing market.

Non-residential permits were up 12.8 per cent to $2.9 billion in May.

© The Vancouver Province 2008