Friday, April 13, 2007

Investment in non-residential building construction

Heavy spending on office buildings in Alberta and British Columbia pushed investment in non-residential building construction to another record high in the first three months of 2007.

First-quarter investment hit $9.4 billion, up 3.3% from the fourth quarter and the 16th consecutive quarterly increase.

In constant dollars, investment in non-residential building construction increased 0.8% from the fourth quarter.

Investment increased in all three components from the fourth quarter. In the commercial sector, it rose 5.0% to $5.6 billion; in the institutional sector, it went up 1.3% to $2.3 billion; in the industrial sector, it edged up 0.2% to $1.4 billion.

Provincially, by far the biggest first-quarter increase (in dollars) occurred in Alberta where investment rose 11.8% to $2.1 billion, a 12th straight quarterly gain. In British Columbia, which was a distant second, investment increased 5.7% to $1.4 billion.

Note to readers Unless otherwise stated, this release presents seasonally adjusted data, which ease comparisons by removing the effects of seasonal variations. Investments in non-residential building construction exclude engineering construction. This series is based on the Building Permits Survey of municipalities, which collects information on construction intentions. Work put-in-place patterns are assigned to each type of structure (industrial, commercial and institutional). These work patterns are used to distribute the value of building permits according to project length. Work put-in-place patterns differ according to the value of the construction project; a project worth several million dollars will usually take longer to complete than will a project of a few hundred thousand dollars. Additional data from the capital and repair expenditures surveys are used to create this investment series. Investment in non-residential building data is benchmarked to Statistics Canada's System of National Accounts of non-residential building investment series. For the purpose of this release, the census metropolitan area of Ottawa–Gatineau is divided into two areas: Ottawa–Gatineau (Que. part) and Ottawa–Gatineau (Ont. part).

In contrast, Nova Scotia posted the biggest drop (in dollars) after registering strong growth in the previous two quarters.

Western Canada's dynamic economy continued to spark the non-residential sector. Other contributing factors included a strong labour market, strong consumer demand for durable goods and declining vacancy rates in large urban centres, which provided added incentive for office building construction.

Locally, 20 of the 34 census metropolitan areas recorded gains, with the strongest increase (in dollars) in Calgary, where investment rose 20.8% to $985 million. In contrast, Hamilton posted the biggest decline (in dollars).

Based on intentions collected in the third quarter of 2006, Statistics Canada's Survey of Private and Public Investment for 2007 forecasted a 5.8% increase in construction investment, including engineering construction.

Investment in non-residential building construction, by census metropolitan area1
	First quarter 2006	Fourth quarter 2006	First quarter 2007	Fourth quarter 2006 to first quarter 2007
	Seasonally adjusted
	$ millions			% change
St. John's	65	52	55	5.2
Halifax	120	167	157	-5.9
Moncton	4	48	57	19.2
Saint John	25	25	30	20.6
Saguenay	33	35	35	1.9
Québec	173	155	162	4.5
Sherbrooke	29	43	40	-5.7
Trois-Rivières	34	36	43	16.9
Montréal	702	696	717	3.0
Ottawa–Gatineau, Ontario/Quebec	374	410	407	-0.8
Ottawa–Gatineau (Que. part)	57	39	40	1.9
Ottawa–Gatineau (Ont. part)	318	371	367	-1.1
Kingston	31	33	40	20.3
Peterborough	2	17	14	-13.8
Oshawa	107	91	90	-1.2
Toronto	1,623	1,511	1,505	-0.4
Hamilton	154	148	134	-9.1
St. Catharines–Niagara	58	74	69	-7.0
Kitchener	131	120	128	7.1
Brantford	2	28	36	31.3
Guelph	4	49	45	-7.3
London	118	105	102	-3.3
Windsor	91	77	83	7.5
Barrie	4	63	63	0.3
Greater Sudbury	28	33	42	27.2
Thunder Bay	30	21	22	8.0
Winnipeg	212	227	221	-2.7
Regina	75	87	79	-8.2
Saskatoon	86	117	111	-4.6
Calgary	531	815	985	20.8
Edmonton	427	415	451	8.6
Kelowna	4	43	44	4.5
Abbotsford	46	75	81	7.5
Vancouver	673	725	771	6.3
Victoria	72	94	90	-4.0
1. Go online to view the census subdivisions that comprise the census metropolitan areas.

Commercial: Robust office activity in Alberta and British Columbia

Investment in commercial building construction increased for the 14th quarter in a row, in the wake of robust activity in office building construction sites in Alberta and British Columbia.

Overall, seven provinces showed increases in commercial investment in the first quarter. The largest contributions (in dollars) occurred in Alberta (+16.0% to $1.4 billion) and in British Columbia (+5.2% to $854 million). Both amounts are all-time highs.

After two consecutive quarterly increases, Saskatchewan recorded the most significant decline, due of a downturn in investment in office and shopping centres buildings.

Among census metropolitan areas, 20 of the 34 areas posted first-quarter gains. Commercial investment in Calgary rose 21.0% to $670 million, while Saskatoon posted the largest decline (-15.3% to $52 million).

A decline in vacancy rates in the major urban centres continued to put positive pressure on office building construction. In addition, growth in retail and wholesale trade in 2006 appears to have had a favourable impact on the construction of warehouses, which posted a gain for the seventh straight quarter.

Spending on industrial construction remains stable

First-quarter industrial investment remained virtually unchanged, rising only 0.2% to $1.4 billion. Strong spending on construction of manufacturing, processing and assembly plants in Ontario and Quebec more than offset drops in the other industrial categories.

After two consecutive quarterly declines, Ontario registered the biggest growth (in dollars), a 5.0% gain to $445 million.

Overall, six provinces showed declines in industrial investment. The largest drop (in dollars) occurred in Saskatchewan, which had posted two consecutive quarterly increases in the third and the fourth quarter of 2006.

Of the 34 census metropolitan areas, 20 registered quarterly growth. Vancouver showed the strongest investment growth (+22.7% to $43 million). Regina experienced the largest decline (-62.5% to $8 million) after hitting a record high in the fourth quarter.

Institutional: Slight rebound halts two quarterly declines

Following two quarterly declines, spending in the institutional component saw a slight rebound of 1.3% to $2.3 billion in first quarter. A decline in educational facilities partially offset gains in all other institutional categories.

Provincially, by far the biggest first-quarter increase in terms of dollar value occurred in Alberta, where investment rose 14.2% to $427 million. In Saskatchewan, which was a distant second, institutional investment increased 17.0% to $89 million. Both provincial levels are record highs.

In contrast, Ontario saw investment fall 3.3% to $899 million, the result of a decline of investment in educational buildings.

Among metropolitan areas, Calgary led first-quarter growth, with investments rising 26.0% to $247 million. The gain was driven by substantial investments in health care and educational facilities.

In Toronto, which experienced the most significant decline, institutional building investment fell 7.7% to $310 million. Of the 34 census metropolitan areas, 18 posted decreases.

Investment in non-residential building construction
	First quarter 2006	Fourth quarter 2006	First quarter 2007	Fourth quarter 2006 to first quarter 2007
	Seasonally adjusted
	$ millions			% change
Canada	8,624	9,087	9,389	3.3
Newfoundland and Labrador	85	75	84	11.8
Prince Edward Island	38	32	28	-14.6
Nova Scotia	230	271	246	-9.1
New Brunswick	170	168	169	0.4
Quebec	1,443	1,430	1,478	3.4
Ontario	3,430	3,292	3,296	0.1
Manitoba	287	301	298	-1.0
Saskatchewan	237	293	273	-6.6
Alberta	1,490	1,890	2,113	11.8
British Columbia	1,171	1,286	1,359	5.7
Yukon	16	30	24	-18.3
Northwest Territories	22	15	12	-21.1
Nunavut	5	5	8	78.5

Available on CANSIM: table 026-0016.

Definitions, data sources and methods: survey number 5014.

More detailed data on investment in non-residential building construction are also available in free tables online. From the Summary tables module or our website choose Construction.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Bechir Oueriemmi (613-951-1165; bdp_information@statcan.ca), Investment and Capital Stock Division.

---

Send this article to another person
E-mail to:
Your name:
Your e-mail: