Private and public investment, 2013
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Public and private organizations and the housing sector report that their anticipated investment in construction and machinery and equipment will reach $398.2 billion in 2013, up 1.7% from 2012 in current dollars. This would be the smallest increase since the economic downturn in 2009.
Investment intentions edge up
The main contributor to the slowdown is an anticipated decline in investment reported by the mining and oil and gas extraction sector. Declines are also anticipated in the information and cultural industries as well as in educational services.
Strong increases in investment were reported in the utilities sector and in transportation and warehousing.
Of total investment, capital spending by the public sector is anticipated to rise 5.0% to $88 billion, the second consecutive increase. Private sector investment is expected to edge up 0.8% to $310.2 billion.
Of the private sector total, investment on housing is anticipated to edge up 0.2% to $104.7 billion. If these intentions are realized, the housing sector will account for 26.3% of total capital spending in the economy.
Investment in non-residential construction is expected to rise 1.4% to $178.9 billion, which corresponds to almost 61% of total investment, excluding housing. Spending on capital machinery and equipment is anticipated to increase 3.6% to $114.6 billion.
Decline in the mining and oil and gas extraction sector
Organizations in the mining and oil and gas extraction sector reported that investment in construction and machinery and equipment is expected to fall by $2.2 billion, or 2.7%, to $79.2 billion. This would be the first decrease since the economic downturn.
The mining and oil and gas sector is still by far the largest for capital spending, accounting for more than one quarter of total investment, excluding housing.
The metal ore mining industry represents much of the decrease in the sector, as its capital spending is expected to decline by 32.1% or $3.5 billion.
Provincially, two provinces account for much of the decline in the mining and oil and gas extraction sector. In Ontario, capital spending in the sector is expected to decline by $1.2 billion or 30.3%, and in British Columbia by $2.4 billion or 25.8%.
The largest provincial increase for the oil and gas extraction sector is from Newfoundland and Labrador, where capital investment is expected to rise by $2.1 billion or 82.6%. Investment in Alberta for the oil and gas extraction sector is expected to remain relatively constant, edging up 0.1%. Provincially, Alberta remains the largest contributor for this sector, representing 77.2% of the total investment in the oil and gas extraction sector.
Strong increases were reported by a number of sectors. Investment in non-residential construction and machinery and equipment by utilities is anticipated to reach $31.3 billion, up 7.7% from 2012. The electric power generation and transmission and distribution industries would account for almost 65% of the increase. Almost two-thirds (65.1%) of the increase in the electric power generation and transmission and distribution industries can be allocated to the province of Ontario, where capital spending is expected to increase by $943.6 million or 16.7%.
Potential investment reported by the utilities sector represents nearly two-thirds of the increase in public sector spending.
Investment in the transportation and warehousing sector is expected to rise 12.8% to $22.4 billion. Much of this growth comes from the pipeline transportation industry, which accounts for almost 40% of the total increase.
Capital outlays by the public administration sector are anticipated to increase 2.0% to $40.5 billion.
Manufacturers reported an intended increase of 2.4% to nearly $20.9 billion for 2013. In retail trade, investment is expected to rise 12.0% as a result of an intended increase in the general merchandise store sub-sector. Investment in the finance and insurance sector is also expected to rise by 11.9%.
Capital spending is anticipated to fall by 7.7% for educational services, and by 3.0% for information and cultural industries.
Provinces and territories
In 2013, investment in non-residential construction and machinery and equipment is expected to increase in every province and territory except New Brunswick, Saskatchewan, British Columbia, and the Northwest Territories.
Provincially, the biggest increase is anticipated in Ontario, where investment is expected to rise 3.5% to nearly $80.1 billion.
Investment is anticipated to rise 12.2% in Newfoundland and Labrador, where the mining and oil and gas sector anticipates a $1.6 billion increase.
In Alberta, investment intentions in non-residential construction and machinery and equipment are expected to rise 2.2%, mainly as a result of the transportation and warehousing as well as the manufacturing sectors.
In New Brunswick, capital spending is anticipated to decline 6.4% to just over $4.1 billion. Three quarters of the decline (75.7%) can be attributed to a $209 million drop in intended investments reported by the utilities sector.
The anticipated 2.7% decline in Saskatchewan is largely attributed to a $525 million decline in manufacturing.
For more information on private and public investment, please see the article "Changes in the Composition of Aggregate Investment" published today in the Economic Insights series.
Note to readers
Investment intentions for non-residential construction and machinery and equipment are based upon a sample survey of 28,000 private and public organizations. This survey was conducted between October 2012 and late January 2013.
For residential construction, the private and public investment program uses housing start estimates from the Canada Mortgage and Housing Corporation (CMHC). Housing starts are forecast under high, medium and low scenarios by the CMHC. These scenarios are used to estimate new housing investment, a key component of the overall housing forecast estimates.
The 2013 estimates for housing in this release are based on the mid-case scenario for each province. The table "Capital spending in Canada, 2013 intentions, by scenario", which appears at the end of this release, covers all three scenarios.
Data in this release are expressed in current dollars.
Definitions, data sources and methods: survey number survey number2803.
The publication, Private and Public Investment in Canada, Intentions, 2013 (Catalogue number61-205-X) will be available soon.
For more information, contact us (toll-free 1-800-263-1136; firstname.lastname@example.org).
For more information, or to enquire about the concepts, methods or data quality of this release, contact Krishna Tiwari (613-951-0700; email@example.com), Investment, Science and Technology Division.
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