Investment in Building Construction Edged Down 0.4% in October

Dec 10, 2020

Total investment in building construction edged down 0.4% to $15.2 billion in October, following a 1.5% decrease in September. Investment in the non-residential sector fell for the fourth consecutive month in October, remaining below pre-COVID-19 levels. Conversely, investment in the residential sector continued to strengthen for the sixth straight month. 

On a constant dollar basis (2012=100), investment in building construction edged down 0.4% to $12.4 billion in October.

Non-residential investment continues to show weakness 

Non-residential investment continued to decline for the fourth consecutive month, down 3.2% to $4.4 billion in October. Investment in commercial building construction accounted for the largest decline of the three components for the month, down 4.7% to $2.5 billion. All provinces and territories were down, with the largest drop in Quebec (-13.4% to $443 million). Over the first 10 months of 2020, Quebec has yet to issue a permit over $100 million for a commercial project, compared with four commercial permits over $100 million for the same period of the previous year. 

A decline of 1.7% was reported in industrial building construction investment in October. Small declines were reported in eight provinces. Meanwhile, Prince Edward Island was up 19.1% to $8.2 million, with this increase partly attributed to the construction of an incubator manufacturing facility at BioCommons Research Park in Charlottetown.

Institutional building construction investment reported a slight decline of 0.8%, with the largest decreases seen in Quebec (-1.9%), followed by Ontario (-1.2%). Gains in British Columbia (+2.2%) and Newfoundland and Labrador (+6.6%) helped to offset these declines. A $43 million long-term care home contributed to the growth in Newfoundland and Labrador.

Residential construction up for a sixth consecutive month

Investment in residential construction edged up 0.7% in October, a sixth consecutive monthly gain. 

Single-unit construction investment led the growth, increasing 3.7% to $5.5 billion with every province reporting gains except for Prince Edward Island. Ontario (+3.3%) and Saskatchewan (+27.7%) accounted for the majority of the increase. Investment in the construction of single family homes was 7.7% higher in October than in February 2020, before the start of the pandemic.

Multi-unit construction investment fell for the first time in five months in October (-2.1%) with declines in seven provinces. Manitoba (-24.6%) and Alberta (-9.2%) reported the largest drops, while Ontario, Quebec and Prince Edward Island reported the only gains for the month in this component. New construction and renovations for apartments in the city of Charlottetown contributed to the growth in Prince Edward Island.

Source: Statistics Canada, www150.statcan.gc.ca/n1/daily-quotidien/201207/dq201207a-eng.htm