Residential slide brings down June building construction investment figures
By Adam Freill
Commercial Construction Industrial Institutional ResidentialSlip in residential investments hits fourth month, bringing overall national numbers down for the month and the quarter.
Investment in non-residential building construction, June 2023. (Source: Statistics Canada, Table 34-10-0175-01–Investment in Building Construction.)
Investment in building construction came in at $18 billion in June, a dip of three per cent from May, reports Statistics Canada. Leading the decline once again was the residential sector, where investment fell for the fourth straight month. It posted investment of $12.1 billion for the month, 4.5 per cent lower than May. The non-residential construction sector was down slightly, posting a dip of just 0.2 per cent at $5.9 billion, almost even with May.
The agency cited widespread declines in Quebec for the slip in non-residential investment. That province dropped 3.1 per cent for the month. Overall, the national figures were up for commercial construction, which rose 0.8 per cent to $3.3 billion, although industrial and institutional were both off by 1.4 per cent, hitting $1.2 and $1.4 billion, respectively.
Despite numerous industry reports advising of a significant need for new housing in Canada, investment in residential sector construction continues to fall. Ontario accounted for most of the losses, as it was off by almost 6 per cent compared to May. Nationally, by segment, single family home construction fell 5.7 per cent to $6.2 billion in June, with declines seen in eight provinces and multi-unit construction declined for the eighth straight month, falling 3.1 per cent to hit $5.9 billion for the month. That was the segment’s lowest level since September 2021.
The months-long slide in residential investment was the most significant factor leading to the decline in overall investment in building construction for the second quarter of 2023. Construction investment was down 5.2 per cent, to $55.7 billion, in Q2. Residential construction was down 8.2 per cent, eclipsing the 1.8 per cent growth posted by the components in the non-residential sector.
Investment in single family homes fell 10.5 per cent to $19.7 billion in the second quarter, the largest decline since the second quarter of 2020. Multi-unit construction declined for the third straight quarter, falling 5.7 per cent to $18.2 billion.
Investment in non-residential construction came in at $17.8 billion in the second quarter, the 10th consecutive quarterly increase. Investment in industrial buildings rose 5.6 per cent to $3.7 billion, while commercial construction increased 1.7 per cent to $9.8 billion. The one soft spot in ICI was in institutional construction, which decreased 0.9 per cent. Quebec’s decline of 4.6 per cent on the quarter accounted for most of the national decline.
