Building construction investment December 2020: Residential strong
By Anthony Capkun
February 8, 2021 – Statscan reports total investment in building construction increased 1.5% in December 2020, following three consecutive months of declines. Investment in the residential sector reached a record high of $11.1 billion.
On a constant dollar basis (2012=100), investment in building construction increased 1.0% to $12.2 billion in December.
Non-residential investment remains flat
In December 2020, non-residential construction investment remained at $4.4 billion for the third consecutive month. Ontario reported the largest gain—up 2.0% from November—but this growth was offset by declines reported in five provinces.
Investment in commercial building construction edged up 0.3% in December, driven in large part by Ontario’s growth in this sector (+3.6% to $1.1 billion). The construction of large projects, such as Amazon’s Project Python in Ottawa, contributed to the rise.
Institutional investment (+0.9%) also increased in December. British Columbia led the growth with the construction of a new RCMP building in Fort St. John.
Conversely, industrial investment edged down 0.2%, with no significant changes reported in any province.
Residential construction star of the show
Investment in residential construction reached a record high in December 2020, up 1.9% to $11.1 billion. Single-unit investment continued to show strength for the third straight month, up 2.6%.
Eight provinces posted gains, with Ontario (+2.8%), Quebec (+3.1%) and Alberta (+4.6%) accounting for the majority of the growth. Newfoundland & Labrador posted a decline in this component for the second straight month, resulting from high-value renovation projects coming to a close.
Nationally, multi-unit investment increased 1.2%. Notable growth was reported in Ontario and British Columbia, attributable primarily to condominium and apartment building construction.
Quarterly growth driven by residential sector
The total value of investment in building construction edged up 0.3% to $46.2 billion in Q4, driven by gains in the residential sector (+5.0%). Investment in residential buildings reported a record quarter, with both single-unit (+7.9%) and multi-unit (+2.2%) investment posting gains.
Commercial (-13.4%), industrial (-6.4%) and institutional (-3.2%) investments all declined in Q4 2020, contributing to an overall drop of 9.8% in non-residential investment. The declines in the second and fourth quarters of 2020 reflected the impact of Covid in the non-residential sector. Prior to 2020, the last decrease was posted in the third quarter of 2016.