Private and public investment

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Investment in non-residential construction and machinery and equipment in 2010 is expected to increase 5.3% from 2009 to $239.9 billion on a current dollar basis. Due to the sizeable decline in 2009, it will still be below the 2008 level. Capital spending by the public sector, particularly the public administration, will account for nearly two-thirds of the increase.

Higher public sector investment is expected to continue into 2010. Capital spending by the public sector is anticipated to increase 9.9% to nearly $87.8 billion.

Private sector investment is expected to rise 2.8% to $152.2 billion. Significant capital spending increases from the mining and oil and gas extraction sector as well as the manufacturing sector are behind that increase.

By investment component, non-residential construction is expected to increase 7.2% to $139.2 billion and account for over three-quarters of total capital spending. More than $2 billion of this increase will come from urban transit projects. Spending on machinery and equipment is expected to increase 2.8% to $100.7 billion.

Public administration continues to lead investment growth

Capital outlays by the public administration rose by $5.1 billion in 2009 and are forecasted to increase by a similar amount in 2010, reaching $44.4 billion. Much of the additional spending is destined for infrastructure projects.

Public administration, namely the federal, provincial/territorial and municipal governments, will account for just over one-half of the $87.8 billion in anticipated capital spending by the broader public sector.

Mining and oil and gas extraction sector resumes growth

Spending by companies in the mining and oil and gas extraction sector is expected to rebound somewhat in 2010, recovering almost a quarter of the decline in 2009. Investment in the sector is expected to total $48.1 billion in 2010, up 11.6%. The 33.1% drop in 2009 was due to declining demand and falling oil prices. These factors resulted in the cancellation or postponement of a number of large investment projects in 2009.

An increase in investments by both the conventional oil and gas extraction and non-conventional oil extraction industries are the main factors behind the anticipated growth this year. However, capital outlays will still be well below 2008 levels.

In terms of dollar value, investment intentions by the mining and oil and gas extraction sector will continue to be the largest in Canada.

Other sectors: Manufacturing industries set to increase investment

Overall, manufacturers plan on spending 14.6% more on non-residential construction and machinery and equipment in 2010. Investment intentions are up $2.0 billion to $15.6 billion.

Much of the manufacturing investment growth is coming from petroleum and coal products manufacturing, where capital outlays are expected to rise by 44.5%, and primary metal manufacturing, where they will be up by 44.8%.

Lower capital spending is expected in the health care and social assistance sector. Decreased investment intentions in the hospital sector are responsible for this decline.

The finance and insurance sector also faces an anticipated decline in investment intentions, mainly as a result of lower intentions in credit intermediation and related activities.

Regions: Investment up in all regions except Manitoba and the Northwest Territories

In 2010, investment in non-residential construction and machinery and equipment is expected to increase in all provinces and territories, except in Manitoba and the Northwest Territories. The largest increases in absolute dollars are expected in Ontario, Quebec and British Columbia.

In Ontario, capital outlays are expected to increase 8.3% to $72.8 billion. This is in large part due to higher investment intentions in two sectors: public administration and transportation and warehousing.

In Quebec, higher investment intentions in the transportation and warehousing sector as well as the mining and oil and gas extraction sector are behind an anticipated increase of 5.2%.

In British Columbia, a 4.8% increase is due to the mining and oil and gas extraction sector and, to a lesser extent, the real estate and rental and leasing sector, as well as the public administration sector.

An anticipated 1.5% decline in outlays in Manitoba is attributable to the transportation and warehousing sector. In the Northwest Territories, an expected 26.0% decline results from decreased spending intentions in the mining and oil and gas sector.

Available on CANSIM: tables 029-0005, 029-0007 to 029-0022, 029-0024, 032-0001 and 032-0002.

Definitions, data sources and methods: survey number 2803.

The publication Private and Public Investment in Canada, Intentions, 2010 (61-205-X, free), will soon be available.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Kamal Sharan (613-951-3452; kamal.sharan@statcan.gc.ca), Investment and Capital Stock Division.