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Non-residential building construction investment Q2 2009


July 19, 2009
By Anthony Capkun

StatsCan reports the investment in non-residential building construction amounted to $10.6 billion (in current dollars) in the second quarter of 2009—a 2.8% drop from the first quarter and the second consective quarterly decrease. This was the result of declines in commercial and industrial building construction.

Investors spent $6.3 billion on commercial projects (down 4.1%), while
investment fell 7.9% to $1.2 billion in the industrial component
Spending in the institutional component continued to rise: up 2.1% to
$3.1 billion.

Provincially, the largest contributions to the quarterly decrease (in
dollars) occurred in Alberta (-7.4% to $2.5 billion) and British
Columbia (-5.2% to $1.3 billion). In both provinces, the decline was
mainly due to lower spending on commercial projects. Saskatchewan
posted the largest increase—the result of higher spending in all three
components.

Investment fell in 19 of the 34 census metropolitan areas. The largest
drops were posted in Calgary, Vancouver and Montreal, and were mainly
due to declines in commercial construction projects. In Barrie, Ont.,
investments rose 21.2% to $132 million, the result of advances in the
institutional component.

Decline in the commercial component
Investment in the construction of commercial buildings declined for the
second consecutive quarter, mainly as a result of lower spending on the
construction of office buildings and retail and wholesale outlets in
Alberta and British Columbia.

Overall, six provinces and two territories recorded decreases in
commercial investment. The most significant drops (in dollars) occurred
in Alberta (-9.8% to $1.6 billion), British Columbia (-7% to $863
million) and Quebec (-4.4% to $985 million). Ontario and Saskatchewan
posted the largest increases, the result of higher spending on the
construction of office buildings.

Decrease in the industrial component
Spending in the industrial component declined for a fourth consecutive
quarter as a result of decreases in all industrial building categories.
Provincially, the largest contributions to the quarterly decline (in
dollars) occurred in Alberta, where investment fell 15.8% to $265
million, and in Ontario, where it was down by 7.6% to $392 million.

Only Prince Edward Island, British Colombia and Saskatchewan posted
advances in the second quarter, mainly due to higher spending on the
construction of manufacturing plants.


Growth in the institutional component

Spending in the institutional component advanced for a sixth
consecutive quarter, principally as a result of higher investment in
healthcare and educational buildings.

Second-quarter increases were recorded in six provinces and the
Northwest Territories. Quebec recorded the largest gain in dollars,
followed by Alberta, as a result of significant spending on healthcare
and educational buildings. After seven consecutive quarters of
increases, Ontario posted the largest reduction in dollars. This was
the result of lower spending in several institutional building
categories.



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