Building construction investment dips in June
Building construction investment hit the brakes on a long series of increases in June, with both the residential and non-residential sectors losing ground.
The drop in building construction investment—of 4.5 percent to $18.4 billion—was the most notable in a long series of overall wins that spans back to November 2020.
Investment in the residential sector dropped 5.8 percent for the month, to $13.8 billion. It was the second month in a row in which investment values fell, after values in May shed 3 percent.
Investment in single-family homes remained well above pre-COVID-19 levels, despite falling 7.3% in June to $7.5 billion. Ontario and Quebec pulled single-unit investment down in June, after Ontario had led national growth since May 2020.
Multi-unit construction investment was down 3.8% to $6.2 billion in June, with more than half of the provinces posting declines. Quebec reported the largest decrease—mainly in Montréal—followed by Ontario and British Columbia.
After posting slight increases for the last six months, meanwhile, investment in the non-residential sector edged down 0.4% to $4.6 billion in June.
Commercial construction investment declined 1.0% to $2.5 billion. The largest drop stemmed from Ontario (down 2.2%) where projects such as storage facilities in Ajax and Brampton began to slow down after peaking earlier this year.
Industrial construction investment was down 1.2% to $825 million in June. Minimal growth in four provinces was not enough to counter the decline.
Institutional investment was the lone industry bright spot. Values increased for the eighth consecutive month, up 1.3% to $1.2 billion. Ontario led the way, advancing 2.8% to $430 million, aided by projects such as a long-term care home in Mississauga.
Fourth consecutive quarterly increase
The good news is, despite June’s decline, investment levels increased for the fourth quarter in a row.
For the second quarter of the year, investment totals rose 7.3 percent to $57.2 billion. Not surprisingly, the residential again sector again drove the advances. Spending in the sector passed the $40-billion mark for the first time ever ($43.4 billion), with an increase of 9.3% compared with the first quarter. Demand continues to be high for single-family homes, particularly in the larger provinces.
Non-residential investment posted a slight increase in the second quarter, up 1.5% to $13.8 billion, yet remained slightly below the same quarter in 2020. Institutional investment reported a 4.8% increase, with the most growth coming from Ontario and Quebec.
Industrial construction investment was up 1.1% despite declines in more than half of the provinces. Quebec and Ontario led the growth, with Quebec 35.7% higher than the second quarter of 2020.
Commercial investment inched forward 0.2% this quarter, remaining below pre-COVID-19 levels. Ongoing projects in Ontario and Alberta helped to offset declines in Quebec and Manitoba.
Featured image: Investment in non-residential building construction, June 2021 (Statistics Canada)