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Q4 2008 investment in nonres building construction


February 24, 2009
By Anthony Capkun

StatsCan reports non-residential construction reached $11 billion in current dollars in the fourth quarter of 2008, up 1.7% from Q3. In 2002 constant dollars, however, investment was down 1.2% from the third quarter. The increase in current dollars was mainly the result of rises in institutional and commercial building construction.

Investors spent $6.8 billion on commercial projects, up 1.5% from Q3, while investment rose 3.7% to $2.8 billion in the institutional component. Spending in the industrial component declined 1% to $1.4 billion.

All
provinces and two territories recorded advances in the fourth quarter.
The fastest increases occurred in Ontario, Quebec, Newfoundland &
Labrador and Alberta—mainly the result of higher spending on
institutional and commercial buildings.




Investment
rose in 27 of 34 census metropolitan areas. The largest increase
occurred in Edmonton, where significant increases in the institutional
and commercial components resulted in a 7% advance to $614 million in
the fourth quarter.




After
rising for seven consecutive quarters, investment in Toronto recorded a
decline, the result of decreases in the commercial and industrial
components.




Commercial component

On a
quarterly basis, investment in commercial buildings increased in the
fourth quarter, mainly as a result of higher spending on the
construction of office buildings in British Columbia and storage and
recreational buildings in Quebec.




Overall,
seven provinces and three territories recorded increases in commercial
investment. The largest contributors (in dollars) were British Columbia
(+2.8% to $928 million), Quebec (+2.0% to $1.1 billion), Manitoba
(+16.5% to $137 million) and Newfoundland & Labrador (+54.1% to $49
million).




In
contrast, Ontario, Nova Scotia and Saskatchewan recorded declines
resulting from lower spending in several commercial building categories.




Institutional component

Spending
in the institutional component advanced for a fourth consecutive
quarter, mainly as a result of higher investment in educational and
health care buildings.




Q4
investment increases were shared by six provinces and two territories.
Ontario recorded the largest gain in dollars, followed by Alberta, as a
result of significant spending on the construction of educational and
health care buildings.




In
contrast, Manitoba posted the largest reduction in dollars. This was
the result of the completion of institutional construction projects
started at the end of 2006 and 2007.




Industrial component

Investment
in industrial building construction declined for the second consecutive
quarter. Increases in spending on several industrial building
categories in six provinces were more than offset by declines that
occurred mainly in the construction of manufacturing plants in Ontario,
Alberta and British Columbia.




Even so,
the $1.4-billion Q4 total for industrial construction was 3% higher
than the average quarterly level recorded in 2007. This increase was
largely attributable to a rise in construction activity on utilities
and primary industry buildings.