Non-residential investment in Canada sees decline for third consecutive month
Total investment in building construction in Canada decreased 1.7% to $15.2 billion in September, after reaching a record high in August. This can be attributed to decreases in the non-residential sector, where non-residential investment dropped by 8.5% to $4.5 billion, the third consecutive monthly decline after peaking in June 2020.
The commercial, industrial and institutional components of non-residential building construction all fell to the lowest levels seen since April 2020. Ontario (-9.5% to $1.8 billion) and Quebec (-15.2% to $1.0 billion) accounted for the majority of the provincial declines in all three non-residential components.
Investment in commercial building construction was down 11.3% to $2.6 billion in September. Newfoundland and Labrador (+0.4%) was the only province to report an increase.
Investment in industrial building construction fell 5.6%, with every province reporting decreases. Quebec reported the largest decline, but remained above pre-COVID-19 levels in this component.
Nationally, the institutional component declined 3.7%, despite gains in five provinces.
Slight increase in residential construction investment
Overall, investment in residential construction was up 1.6%, led by multi-unit investments. Multi-unit construction rose for the fifth consecutive month with gains in seven provinces. Manitoba and Quebec led the advance with both new construction and renovation projects on apartment buildings. The largest declines were reported in British Columbia (-4.1%), continuing a downward trend following the peak reached in May 2019.
Single unit investment in building construction was largely unchanged in September (-0.6%) after four consecutive monthly increases from May through August. Declines reported in five provinces were mostly offset by gains in Newfoundland and Labrador (+8.5%), New Brunswick (+5.8%), British Columbia (+1.8%) and Ontario (+0.2%).
Quarterly investment bounces back
Investment in building construction saw strong growth of 25.7% in the third quarter, bouncing back from a substantial decline (-19.5%) in the second quarter of 2020, impacted by COVID-19-related shutdowns. All components in the residential and non-residential sectors showed growth compared with the previous quarter. While investment in both single and multi-unit construction has rebounded from the second quarter to $15.6 billion, multi-unit investment, which reached a record high on a quarterly basis, has been surpassing single-unit investments since the first quarter of 2020.
The commercial (+13.8% to $8.7 billion) and industrial (+5.1% to $2.6 billion) components of non-residential investment have not yet returned to pre-COVID-19 levels on a quarterly basis. However, the institutional component (+7.5% to $3.5 billion) has surpassed pre-COVID-19 levels.
Provincially, Ontario and Quebec, which accounted for more than three-quarters of the gain, led the quarterly growth.