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April 17, 2007

Economy

Another record for ICI sectors

No sign of slowdown in non-residential building

OTTAWA

Non-residential building construction hit another record high in the first three months of this year, according to Statistics Canada.

First-quarter investment hit $9.4 billion, up 3.3 per cent from the fourth quarter and the 16th consecutive quarterly increase.

Investment increased in all three components from the fourth quarter. In the commercial sector, it rose five per cent to $5.6 billion; in the institutional sector, it went up 1.3 per cent to $2.3 billion; in the industrial sector, it edged up 0.2 per cent to $1.4 billion.

Provincially, by far the biggest first-quarter increase (in dollars) occurred in Alberta where investment rose 11.8 per cent to $2.1 billion, a 12th straight quarterly gain. In British Columbia, which was a distant second, investment increased 5.7 per cent to $1.4 billion.

Western Canada’s dynamic economy continued to spark the non-residential sector. Other contributing factors included a strong labour market, strong consumer demand for durable goods and declining vacancy rates in large urban centres, which provided added incentive for office building construction.

Locally, 20 of the 34 census metropolitan areas recorded gains, with the strongest increase in Calgary, where investment rose 20.8 per cent to $985 million. In contrast, Hamilton posted the biggest decline.

Based on intentions collected in the third quarter of 2006, Statistics Canada’s Survey of Private and Public Investment for 2007 forecasted a 5.8 per cent increase in construction investment, including engineering construction.

A decline in vacancy rates in the major urban centres continued to put positive pressure on office building construction.

Investment in commercial building construction increased for the 14th quarter in a row, in the wake of robust activity in office building construction sites in Alberta and B.C.

Among census metropolitan areas, 20 of the 34 areas posted first-quarter gains. Commercial investment in Calgary rose 21 per cent to $670 million, while Saskatoon posted the largest decline (-15.3 per cent to $52 million).

Spending in the institutional component saw a slight increase of 1.3 per cent to $2.3 billion in first quarter. A decline in educational facilities partially offset gains in all other institutional categories.

Provincially, the biggest first-quarter increase occurred in again Alberta, where investment rose 14.2 per cent to $427 million. In Saskatchewan, which was a distant second, institutional investment increased 17 per cent to $89 million. Both are record highs.

In contrast, Ontario saw investment fall 3.3 per cent to $899 million, the result of a decline of investment in educational buildings.

In Toronto, which experienced the most significant decline, institutional building investment fell 7.7 per cent to $310 million. Of the 34 census metropolitan areas, 18 posted decreases.

First-quarter industrial investment remained virtually unchanged, rising only 0.2 per cent to $1.4 billion. Strong spending on construction of manufacturing, processing and assembly plants in Ontario and Quebec more than offset drops in the other industrial categories.

After two consecutive quarterly declines, Ontario registered the biggest growth, a five per cent gain to $445 million.

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