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Investment in non-residential building construction, fourth quarter 2015

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Released: 2016-01-18

Investment in non-residential building construction

$12.6 billion

Fourth quarter 2015

-1.7% 

(quarterly change)

Investment in non-residential building construction reached $12.6 billion in the fourth quarter, down 1.7% from the previous quarter. The decline largely reflected a downward trend in spending on the construction of commercial buildings and, to a lesser extent, on the construction of industrial buildings.

The non-residential sector continued to be affected by a number of factors, namely high vacancy rates for office buildings in major urban centres and lower profits for companies in the primary resource sector, specifically the oil and gas industry.

Chart 1  Chart 1: Investment in non-residential building construction
Investment in non-residential building construction

Nationally, investment in non-residential building construction was down in six provinces in the fourth quarter. The largest declines occurred in Quebec and Ontario.

In Quebec, investment was down in all three components, led by declines in the commercial and institutional components. In Ontario, the decrease resulted mainly from the commercial and institutional components. As well, most of the projects in these components in the two provinces began in 2013 or early 2014 and are now nearly completed.

Saskatchewan had the largest increase in the fourth quarter, mainly due to higher spending on the construction of institutional buildings.

Census metropolitan areas

Total investment fell in 18 of the 34 census metropolitan areas (CMAs) in the fourth quarter.

The sharpest declines occurred in Canada's two largest CMAs, Toronto and Montréal. The decrease in Toronto followed seven consecutive quarterly increases and was due to lower spending on the construction of institutional and commercial buildings. In Montréal, investment decreased for the third consecutive quarter and was mainly a result of lower spending on institutional and commercial projects.

The largest increases occurred in Edmonton, Vancouver and Saskatoon. In Edmonton, higher investment in the construction of institutional buildings led the increase. In Vancouver, the gain originated from higher investment in the construction of commercial and industrial buildings, while in Saskatoon, spending increased in all three components.

Commercial component

Investment in the construction of commercial buildings decreased 2.5% to $7.4 billion in the fourth quarter, marking a fourth consecutive quarterly decrease. Seven provinces posted a decline, mainly due to lower investment for most types of commercial buildings.

In Ontario, investment fell 2.3% to $2.8 billion, mainly because of lower spending on the construction of hotels, recreational buildings, retail and wholesale stores as well as warehouses.

In Alberta, investment declined 3.2% to $1.8 billion, a fourth straight quarterly decline. The decrease was mainly the result of lower spending on the construction of office buildings and warehouses and, to a lesser extent, accommodation facilities. Spending was influenced by the downturn in the petroleum sector.

In Quebec, investment fell 4.0% to $1.2 billion. The decline was mainly the result of lower spending on postal service buildings and office buildings.

The largest increase occurred in British Columbia, where investment rose 2.2% to $873 million, mainly as a result of increased activity in the construction of warehouses and, to a lesser extent, of retail and wholesale stores.

Chart 2  Chart 2: Commercial, institutional and industrial components
Commercial, institutional and industrial components

Industrial component

Investment in industrial projects declined 2.1% nationally to $1.5 billion, largely as a result of lower spending on the construction of primary sector and utilities buildings. Four provinces recorded lower investment in industrial projects in the fourth quarter.

The largest decrease occurred in Alberta, where investment fell 20.7% to $238 million. This decline stemmed primarily from lower spending on buildings linked to the petroleum industry, such as maintenance and utilities buildings, continuing the downward trend that began in the first quarter of 2015.

Conversely, the largest increase occurred in British Columbia, where investment rose 13.9% to $150 million, mainly as a result of higher spending on the construction of maintenance buildings.

Institutional component

Investment in the construction of institutional buildings edged up 0.1% to $3.7 billion, a seventh consecutive quarterly increase. Six provinces posted increases, led by Alberta.

In Alberta, investment rose 16.9% to $737 million, mainly because of higher spending on educational buildings.

Conversely, Ontario and Quebec had the largest decreases in the fourth quarter. Investment fell 3.6% to $1.4 billion in Ontario, reflecting lower spending on the construction of health care facilities. In Quebec, institutional building construction projects decreased 5.6% to $766 million, as a result of lower spending on the construction of health care facilities, educational buildings and correctional services buildings.



  Note to readers

Unless otherwise stated, this release presents seasonally adjusted data expressed in current dollars, which facilitates comparisons by removing the effects of seasonal variations. For more information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.

Investments in non-residential building construction exclude engineering construction (such as for highways, sewers, bridges and oil and gas pipelines). This series is based on the Building Permits Survey of municipalities, which collects information on construction intentions.

Work put-in-place patterns are assigned to each type of structure (industrial, commercial and institutional). These work patterns are used to distribute the value of building permits according to project length. Work put-in-place patterns differ according to the value of the construction project; a project worth several million dollars will usually take longer to complete than will a project of a few hundred thousand dollars.

Additional data from the Capital and Repair Expenditures Survey are used to create this investment series. Investments in non-residential building data are also benchmarked to Statistics Canada's System of National Accounts' non-residential building investment series.

For the purpose of this release, the census metropolitan area of Ottawa–Gatineau (Ontario/Quebec) is divided into two areas: the Ottawa part and the Gatineau part.

Contact information

For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca).

To enquire about the concepts, methods or data quality of this release, contact Mahamat Hamit-Haggar (mahamat.hamit-haggar@statcan.gc.ca; 613-983-0315), Investment, Science and Technology Division.

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