Building construction investment in Canada is holding steady as Canadians brace for an anticipated recession. Albeit, many Canadians are wondering how higher interest rates will impact the construction and housing industries. October 17th, Statistics Canada reported an overall increase in building construction investment in Aug 2022 by .04% to $21.1 billion.
Let’s break that statistic down.
Residential Building Construction Investment
Most of the major growth in residential building construction investment is attributed to growth in British Columbia. Across Canada, residential building investment has seen increases in condos and rental apartments investment by 7.3% year over year. By comparison, building construction investment in single homes increased by only 2.7%, year over year.
Non-Residential Building Construction Investment
According to Statistics Canada, despite and over all decline of investment in non-residential construction (of 0.2%), industrial building construction rose by .9% monthly to $1 billion. The industrial sector has seen steady gains across most provinces for 9 months. Year over year, investment in industrial construction has increased by 20.2%. In contrast to the last 9 months, it appears the growth is steadying.
Commercial investment in building construction gained monthly .1% to $3 billion. A small increase, compared to the 15.4% growth year over year from Aug 2021 to 2022.
On the decline was institutional investment, which declined by 1.4%, to $1.3 billion. By comparison, year over year this sector has had an average increase of 1.8% in construction building investment.
Non-residential building construction investment saw a steady increase across the country, in 6 provinces. Noted was a monthly investment decline of 2% in Ontario. In contrast, Saskatchewan saw an overall monthly increase of 4.6% in non-residential construction investment.
The growth in construction investment appears to be steadying. The gains in construction investment are less significant than the previous months leading up to August. Considering the significant growth in industrial and commercial construction investment and growth of the residential market over the past year, it appears that overall growth is holding.
Under the current economic conditions, companies need to stay profitable. Interest rate hikes battle inflation while the construction industry grapples with labour shortages and higher material costs. This may require companies to operate with leaner teams and flexible budget allocations.
Contact 4castplus to find ways to operate leaner, and more effectively manage cash flow, project budgets and procurement. Base decisions on real-time visibility and oversight of budgets, forecasts, costs, contracts and accruals.
We offer project management and project purchasing software, that places particular focus on the financial management of projects. Ensuring projects are delivered profitably, on time and on budget is what we do.