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Tuesday, December 7, 2004

Fixed assets

2004

By the end of 2004, the country will have nearly $2.6 trillion in structures and equipment in use to produce goods and services in the economy. This represents an increase (in real terms) of 31% over the last 10 years.

About two-thirds of this total consists of building and engineering structures, while about one-third comprises machinery and equipment.

Growth has been particularly strong in machinery and equipment assets, which will amount to an estimated $879 billion by the end of 2004, a 73% increase during the past decade.

Fixed assets

2004

  Building and engineering structures Machinery and equipment Total
  $ billions constant 1997
Total 1,672.1 879.3 2,551.4
Business sector 1,132.9 798.3 1,931.2
Public administration, education and health and social assistance 539.2 81.0 620.2

Over the past decade, capital intensity (as measured by the value of fixed assets over employment) has shown a steady increase. The employment data are from the Survey of Employment, Payrolls and Hours.

Among the different sectors, good producing industries generally are much more capital intensive than services producing industries, with capital intensity in mining and utilities dwarfing that of all other sectors. The past decade has seen capital intensity rising fastest in service producing industries. Finance and insurance, and Miscellaneous services now employ more than double the capital per worker than was used in 1994. Surprisingly, capital intensity has declined in manufacturing, despite continued strength in the sector. This is largely the result of investment not keeping pace with strong employment growth. This could have a negative effect on the competitiveness of the sector.

Capital intensity by sector
  1994 2004 % variation
  $ 000 thousands constant 1997  
Forestry and logging 65 93 42
Mining and oil and gas extraction 1,519 1,848 22
Utilities 2,597 3,010 16
Construction 58 60 3
Manufacturing 156 148 -5
Trade1 30 43 43
Transportation and warehousing 296 349 18
Information and cultural industries 309 414 34
Finance and insurance 94 205 118
Real estate and rental and leasing 845 856 1
Educational services 94 123 30
Health care and social assistance 44 55 25
Arts, entertainment and recreation 52 68 31
Accommodation and food services 32 31 -2
Miscellaneous services2 13 29 133
Other services (except public administration) 31 44 45
Public administration 486 551 13
Total 173 188 9
1.Includes wholesale and retail trade.
2.Includes professional, scientific and technical services, management of companies and enterprises, and administrative and support, waste management and remediation services.

The same message emerges from the depreciation analysis in manufacturing. New investment has not been keeping pace with depreciation as shown by the ratio of new investment to depreciation.

To better prepare themselves for fiercer international competition, manufacturers will have to accelerate investment, especially in new machinery and equipment that embeds the newest technology.

Ratio of investment to depreciation in manufacturing
  Investment Depreciation Ratio
  $ billions constant 1997  
1994 15.6 16.2 0.96
1995 17.6 16.5 1.07
1996 18.6 16.8 1.11
1997 20.7 17.1 1.21
1998 21.0 17.6 1.19
1999 21.2 18.2 1.16
2000 21.7 18.7 1.16
2001 17.6 19.1 0.92
2002 15.7 19.2 0.82
2003 17.6 19.2 0.92
2004 18.4 19.3 0.95

Note: These series are presented on the basis of the North American Industry Classification System (NAICS Canada 2002). At this time we have both current and constant dollar series available. These series using a chain Fisher Formula will be available later in December.

Available on CANSIM: table 031-0002.

Definitions, data sources and methods: survey number 2820.

To order data, contact Flo Magmanlac (613-951-2765). For more information, or to enquire about the concepts, methods or data quality of this release, contact Richard Landry (613-951-2579), Investment and Capital Stock Division.


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Date Modified: 2004-12-07 Important Notices