Non-Res construction drops in second quarter: StatsCan

Investment in non-residential building construction decreased 0.8 per cent to $12.8 billion in the second quarter across Canada, marking the second consecutive quarterly decline, Statistics Canada reports today.

The decrease resulted from lower spending on the construction of commercial and industrial buildings.Overall, total investment decreased in six provinces in the second quarter, with Quebec registering the largest decline, followed by Saskatchewan. In Quebec, the decrease was mostly a result of lower spending on institutional buildings, while in Saskatchewan the decline was attributable to all three components.

Ontario, British Columbia, Newfoundland and Labrador and Nova Scotia posted slight increases in the second quarter.

Commercial component

Investment in commercial building construction declined 1.6 per cent to $7.6 billion in the second quarter. This was the third consecutive quarterly decrease and was the result of lower spending in eight provinces across several categories of commercial buildings.

Ontario registered the largest decline in commercial building construction investment, followed by Alberta.

In Ontario, investment in commercial building construction fell 2.1 per cent to $2.8 billion. This was the fourth consecutive quarterly decline and originated mainly from lower spending in the construction of recreational and retail and wholesale buildings.

In Alberta, commercial investment was down 1.8 per cent to $1.9 billion, a third straight quarterly decline. This resulted mainly from lower spending in the construction of office buildings and other accommodation facilities.

In Nova Scotia, commercial investment was up 6.6% to $113 million, a third consecutive quarterly advance. The gain was largely attributable to higher spending on hotels and office building construction.

Industrial component

Investment in industrial building construction decreased 2.4 per cent to $1.6 billion in the second quarter. This was a second quarterly decline and was attributable to lower spending in every industrial building category.

Overall, investment in industrial construction projects declined in seven provinces. The largest declines were in Ontario, with Alberta a close second. In Ontario, industrial investment decreased 2.0 per cent to $702 million, largely because of lower spending in the construction of primary industry and manufacturing facilities. In Alberta, industrial investment declined 3.6 per cent to $359 million, as a result of lower spending on the construction of maintenance and utilities buildings.

In the second quarter, the three provinces that registered gains were Quebec, New Brunswick and British Columbia. In Quebec, industrial construction investment was up largely from higher spending on the construction of primary industry and utilities buildings. In New Brunswick, investment increased mainly as a result of higher spending on the construction of primary industry buildings, while in British Columbia, the increase was largely from the construction of maintenance buildings.

Institutional component

Spending in the institutional component rose 1.8 per cent to $3.6 billion, a fifth consecutive quarterly increase. Growth among several categories of institutional buildings, particularly medical facilities and educational institutions, accounted for the advance in the component.

Ontario and Alberta were the major contributors to the increase in institutional building construction investment in the second quarter. In Ontario, investment advanced 6 per cent to $1.4 billion and came mainly from higher spending on the construction of medical facilities and nursing homes and retirement residences. In Alberta, institutional investment rose 7 per cent to $512 million, the fourth consecutive quarter of growth. This increase was mainly a result of higher spending on the construction of educational institutions.

In contrast, Quebec registered the largest decrease, with spending on institutional buildings declining 5.3 per cent to $892 million. This was the second consecutive quarter of decline and came mostly from lower spending on the construction of health care facilities.

Census metropolitan areas

Total investment was down in 19 of the 34 census metropolitan areas in the second quarter. The largest decline occurred in Montréal, followed closely by Ottawa. In Montréal, the decrease was attributable to lower institutional construction spending, while the decline in Ottawa came from lower spending on commercial buildings.

Conversely, the largest gains occurred in Toronto, Edmonton and Vancouver. In both Toronto and Edmonton, the increases resulted mainly from higher investment in the construction of institutional structures and, to lesser extent, commercial buildings, while in Vancouver, the gain was due to higher institutional and industrial construction spending.