Building permits rose 15% to $13.8B in October, well ahead of expectations for a 1% decline…

… driven by a $1.1B rise in residential construction intentions. A multi-family rebound in Ontario led the way, which has been a source of weakness for the majority of the year.

Non-residential permitting was strong too, with higher office permitting in Ontario and institutional activity in BC driving a $700M pickup versus September.

Q3 capacity utilization came in at 78.5%, missing estimates of 79.3% but up from 77.6% in Q2 - with broad-based improvements in production efficiency. The gain in construction was notable, given it was the first in nine quarters…

… and manufacturing rebounded 1.2% after a weaker Q2, as it continues to close the gap to industrial capacity utilization.

Non-durable goods were the primary driver, thanks to an 11 point increase in petroleum and coal products Q/Q…

… while manufacturing efficiency in durable goods was mixed, with strength in transportation and furniture offsetting weakness in electrical equipment.

Flagging Bombardier’s $400M contract with the RCAF for six Global 6500 aircraft, keeping up the momentum from its $2B, 50 aircraft order in the summer. The deal should support continued backlog growth…

… which the company will need to execute on in order to grow into what looks to be a pretty rich valuation.

CAE Inc. (CAE) ran 5% Friday following its announced 10-year, $270M contract for Australia’s future air training system. Assuming an even yearly run-rate, the deal only adds 1-2% to defense revenue…

… but more importantly, it reinforces the multi-year setup for defense spending globally and builds on earlier large contract success in Canada. With the backlog sitting at $11B…

… and the new CEO likely to drive U.S. growth, CAE’s revenue runway is long - justifying a premium over its long-term average valuation.

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