Canadian Construction Investment Down in Fourth Quarter

Fourth-quarter investment in non-residential building construction in Canada decreased 0.6 percent from the previous quarter to C$11 billion (US$10.9 billion). This was the second consecutive quarterly decline and largely reflected lower spending in the construction of institutional buildings in seven provinces.

Investment fell in four provinces in the fourth quarter. The largest decreases occurred in Ontario and British Columbia. Investment in Ontario fell in all three components, while British Columbia's investment was down in commercial and institutional components.

The largest increases occurred in Alberta, Saskatchewan and Quebec. Increases in commercial investment led the gains in Alberta and Quebec. All three components rose in Saskatchewan.

Investment was down in 18 of the 34 census metropolitan areas. The largest declines occurred in Vancouver and Kitchener-Cambridge-Waterloo, where all three components were down in both census metropolitan areas. Lower commercial investments contributed most to the decline in each.

The largest increases were in Montréal, London and Calgary. The increases in Montréal and Calgary were mostly the result of rising commercial investment. In London, the increase resulted from higher institutional investments.

Institutional component
Spending in the institutional component fell 3.7 percent to C$3.2 billion (US$3.16 billion), its seventh consecutive quarterly decline.

Institutional investment fell in seven provinces, with the largest declines in Alberta and British Columbia. The largest contributing factor in both provinces was lower investment in educational buildings.

In Alberta, institutional investment fell 16.4 percent to C$331 million (US$326.5 million). Spending was down for the seventh consecutive quarter and declined in all institutional categories.

In British Columbia, institutional investment declined 8.8 percent to C$392 million (US$386.7 million).

The largest increase was in Saskatchewan, where investment rose 12.4 percent to C$117 million (US$115.4 million), following three consecutive quarters of decline. The largest contributor to the increase was investment in government buildings.

Commercial component
Investors put C$6.5 billion (US$6.4 billion) into commercial projects in the fourth quarter, up 0.8 percent from the previous quarter. In the five provinces posting increases, gains were spread among several commercial construction buildings categories.

The largest contributions in the commercial component came from Alberta, where investment rose 7.5 percent to C$1.6 billion (US$1.6 billion). This was the third consecutive quarterly gain and came mainly from higher spending for construction of office buildings and warehouse and storage facilities. In Quebec, investment increased 4.8 percent to C$1.2 billion (US$1.2 billion), with gains mostly in the construction of retail and wholesale outlets.

Ontario and British Columbia posted the largest declines. Ontario saw commercial investment decline 2.6 percent to C$2.4 billion (US$2.4 billion), mostly from lower construction of recreational buildings and retail and wholesale outlets. In British Columbia, commercial investment declined 7.7 percent to C$705 million (US$695.5 million), mostly because of lower spending on recreational buildings.

Industrial component
Investment in industrial projects totaled C$1.2 billion (US$1.2 billion) in the fourth quarter, unchanged from the previous quarter as gains in sixth provinces were offset by declines in the others.

The largest increase was in Alberta, where investment rose 14 percent to C$284 million (US$280.2 million), following a decline in the previous quarter. This increase mostly came from higher investments in maintenance and manufacturing facilities.

The largest declines were in Ontario and Quebec. In Ontario, industrial investment declined 5.5 percent to C$449 million (US$443 million), largely as a result of lower investments in utility buildings and maintenance facilities. In Quebec, spending fell 6.2 percent to C$246 million (US$242.7 million), mostly the result of lower investment in manufacturing facilities.