Investment in Canadian new building construction up 1.8 percent in July

Monday, 21 September 2020 13:45:41 (GMT+3)   |   San Diego
       

According to Statistics Canada, total investment in building construction increased 1.8 percent to $15.1 billion in July. Residential sector investment increased 4.9 percent to $9.9 billion, while non-residential investment decreased 3.7 percent to $5.3 billion. Construction activity has rebounded in the last few months, with investment in building construction remaining slightly lower than February 2020 levels, before COVID-19 construction restrictions were first put in place.

Investment in residential construction rose 4.9 percent to $9.9 billion in July, with increases in both single-unit (+7.5 percent to $5.1 billion) and multi-unit (+2.4 percent to $4.8 billion) investment. Ontario (+4.5 percent to $4.0 billion) and Quebec (+5.6 percent to $2.0 billion) led all of Canada in residential gains.

Despite another month of residential growth, national investment was 3.7 percent lower than the pre-COVID-19 levels observed in February 2020. Quebec had the largest gap between current and pre-COVID-19 levels, down $249.6 million or 10.9 percent compared with February 2020.

Following strong gains in June, non-residential construction investment declined 3.7 percent to $5.3 billion in July, with decreases reported in all three components. Eight provinces reported declines for the month, with the largest decreases in Ontario (-3.2 percent to $2.1 billion) and Quebec (-4.8 percent to $1.4 billion). Newfoundland and Labrador (+4.2 percent) and Prince Edward Island (+4.1 percent) were the only provinces to report gains for the month. Further declines are anticipated in this sector as many office buildings and shopping malls remain under-utilized.

The commercial component represented the majority of non-residential declines, down 5.0 percent to $3.1 billion in July. Nine provinces reported declines for the month, while Prince Edward Island reported an increase of 29.2 percent to $7.1 million. The largest declines were reported in Quebec (-7.8 percent) and Ontario (-3.9 percent), although both provinces remained above pre-COVID-19 levels. Declines in those provinces were attributed to a combination of fewer new construction starts, and several major projects winding down to completion.

The institutional component of non-residential investment decreased 0.8 percent to $1.2 billion in July. Quebec reported the majority of declines for the month, more than offsetting gains in British Columbia and Newfoundland and Labrador.

Nationally, the industrial component was down 2.8 percent in July. Eight provinces reported declines, with the largest decrease in Ontario, down 4.2 percent to $369.5 million.


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