The 2020 Mid-Year Economic Update_long

Canadian Nonresidential Construction Up 1.2% in 3Q

Total investment rises in five provinces.

Third quarter Canadian investment in nonresidential building construction increased 1.2 percent from the previous quarter to C$13.1 billion (US$11.6 billion). It was the second consecutive quarterly increase and resulted from higher spending on commercial building construction.

At the national level investment rose in five provinces in the third quarter, with the largest gains occurring in Alberta and Ontario. In Alberta, the gains were led by higher investment in the commercial and institutional components, while in Ontario, they occurred in the industrial, commercial and institutional components.

All four of the Atlantic provinces and Quebec posted declines in the third quarter. Quebec recorded the largest drop, mostly as a result of lower spending on commercial and industrial projects.

Metropolitan Areas

Non-residential investment rose in 19 of 34 census metropolitan areas. The largest increases were in Calgary and Kitchener–Cambridge–Waterloo.

In Calgary, the gain was mostly attributable to commercial and institutional investment, while in Kitchener–Cambridge–Waterloo, it came from higher spending on institutional and industrial projects.

Hamilton and Ottawa posted the largest declines, as a result of decreases in all three components.

Industrial Component

Investment in industrial projects increased in six provinces, rising 1.3 percent nationally to C$1.6 billion (US$1.4 billion) in the third quarter.

This was mainly the result of higher spending on the construction of primary industry, utility and maintenance buildings.

The biggest gain was in Ontario, where investment rose 9.5 percent to C$663 million (US$588.8 million) as a result of higher spending recorded in every industrial category except manufacturing plants.

Conversely, the largest decrease occurred in Quebec where investment fell 9.2 percent to C$304 million (US$270 million), mainly as a result of lower spending on the construction of manufacturing plants.

Institutional Component

Investment in institutional construction increased 0.7 percent in the third quarter to C$3.4 billion (US$3 billion), the second consecutive quarterly increase. The gain was mostly attributable to higher investment for educational facilities.

Quebec and Alberta were the major contributors to the increase in institutional investment. The advance in Quebec resulted mainly from higher spending on the construction of educational buildings, while the increase in Alberta was the result of higher spending spread among several institutional building categories.

New Brunswick had the largest decline, as lower spending was recorded in the construction of educational buildings and health care facilities.

Commercial Component

Investment in commercial building construction increased 1.3 percent from the second quarter to C$8.1 billion (US$7.2 billion)in the third quarter. This was the fifth consecutive quarter of growth and resulted from gains spread among several categories of commercial buildings in six provinces.

Alberta was by far the main contributor to the increase in commercial investment, followed by British Columbia. In Alberta, commercial investment rose 3.6 percent to C$2 billion (US$1.8 billion). This was the fourth consecutive quarterly gain and came mainly from higher spending in several commercial building categories. In British Columbia, investment increased 5.7 percent to C$880 million (US$781.5 million), the second straight quarterly gain. The increase resulted from rising investment for most types of commercial buildings.

The largest drop occurred in Quebec, where investment fell 3.3 percent to C$1.3 billion (US$1.2 billion), mainly because of lower spending for office buildings.

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