The 2020 Mid-Year Economic Update_long

Canadian Nonresidential Construction Down 0.5% in 2Q

Total investment falls in six provinces.

Second quarter Canadian investment in nonresidential building construction decreased 0.5 percent from the previous quarter to C$12.8 billion (US$11.9 billion). It was the second consecutive quarterly decline and resulted from lower spending on industrial and institutional buildings.

At the national level, total investment decreased in six provinces in the second quarter. Alberta and British Columbia had the largest declines as a result of lower spending in the industrial, commercial and institutional components.

Ontario, Quebec, Saskatchewan and Prince Edward Island posted increases in the second quarter. The largest gain was in Ontario, where investment rose 1.2 percent to C$5 billion (US$4.7 billion) as a result of higher commercial investment.

Metropolitan Areas

Investment was down in 20 of the 34 census metropolitan areas in the second quarter, with the largest declines in Vancouver, Hamilton and London. In Vancouver and Hamilton, investment fell in all three components, while the decrease in London was attributable to commercial and institutional spending.

The largest advances occurred in Kingston, Ottawa and Toronto. In Kingston, the increase resulted from higher investment in the construction of institutional buildings, while the gains in Ottawa and Toronto were due to commercial and industrial spending.

Industrial Component

Investment in the industrial component declined 6.1 percent to C$1.6 billion (US$1.5 billion) in the second quarter, a third consecutive quarterly decrease.

Overall, eight provinces posted declines in the industrial component. The largest declines were recorded in Alberta and British Columbia, mainly as a result of lower spending on maintenance buildings and manufacturing plants.

The two provinces that had gains were Nova Scotia and Prince Edward Island. In Nova Scotia, industrial investment was up for a third consecutive quarter; this most recent advance was largely attributable to manufacturing plants. In Prince Edward Island, investment increased mainly as a result of higher spending on the construction of primary industry buildings.

Institutional Component

Spending in the institutional component decreased 0.4 percent to C$3.3 billion (US$3.1 billion). It was the second consecutive quarterly decline in this component at the national level. Investment was down in every province except Quebec.

The largest decline occurred in Ontario, where investment fell 2.3 percent to C$1.2 billion (US$1.1 billion). The decrease in the second quarter was attributable to lower spending in most institutional building categories.

In Quebec, institutional investment rose 7.5 percent to C$830 million (US$772.7 million). The second quarter advance resulted mainly from higher spending on the construction of health care facilities and educational buildings.

Commercial Component

Investment in commercial building construction reached C$8 billion (US$7.4 billion) in the second quarter, up 0.7 percent from the previous quarter and the fourth consecutive quarter of growth. Ontario was by far the largest contributor to the increase in commercial investment, followed by Saskatchewan. In Ontario, investment rose 3.4 percent to C$3.1 billion (US$2.9 billion), mostly as a result of higher spending on office buildings and retail and wholesale outlets.

In Saskatchewan, commercial investment was up 7.1 percent to C$266 million (US$247.6 million). The gains in Saskatchewan were mainly attributable to higher spending on office building and retail and wholesale outlets.

The largest decrease occurred in Quebec, where investment fell 2.7 percent to C$1.4 billion (US$1.3 billion), mainly as a result of lower spending in several commercial building categories.

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