Investment in Building Construction Rose 12.0% in June
Aug 25, 2020
Total investment in building construction increased 12.0% to $14.9 billion in June, following the 62.2% gain observed in May. Although COVID-19-related workplace guidelines remained in place for June, construction sites were largely back to normal activity, which contributed to gains in all components of residential and non-residential investment. Despite June’s growth, investment in building construction remained 3.1% lower than February 2020, before COVID-19-related restrictions were first put in place. On a constant dollar basis (2012=100), investment in building construction increased 11.7% to $12.1 billion in June.
Residential construction continues to recover
Investment in residential construction rose 12.2% to $9.4 billion in June, with gains in both single-unit (+13.0% to $4.7 billion) and multi-unit (+11.4% to $4.7 billion) investment. Ontario and Quebec led all provinces in growth for the month, while Saskatchewan was the only province to report a decline. Nationally, after back-to-back months of strong gains, residential investment still remained 8.6% lower than February 2020 levels.
Non-residential investment returns to pre-COVID-19 levels
Non-residential construction investment increased 11.6% to $5.5 billion in June. Strong gains in Ontario and Quebec led to national growth in all components of non-residential investment, outweighing declines reported in all other provinces for the month.
With the strong increase in non-residential construction in June, investment for all three components is now somewhat higher than the levels recorded before COVID-19 restrictions were put in place.
The commercial component represented the majority of non-residential construction gains, up 14.7% to $3.3 billion, with notable increases in Ontario and Quebec. Alberta (-4.2% to $384.5 million) and British Columbia (-3.2% to $458.3 million) reported the largest declines for the month.
The industrial (+7.7%) and institutional (+6.6%) sectors also increased in June, supported by strong gains in Ontario and Quebec
Second quarter of 2020 down sharply
Public health measures put in place to slow the spread of COVID-19 severely impacted the construction industry in the second quarter. Total investment in building construction amounted to $36.3 billion, a decrease of 20.0% (-$9.1 billion) compared with the first quarter. This is by far the largest quarter-over-quarter decrease since January 2010, when comparable data were first available.
All provinces and territories were down for the quarter, with Ontario (-$3.4 billion) and Quebec (-$3.2 billion) posting the largest declines. This represented a record quarter-over-quarter decrease for both provinces.
Residential investment fell in the second quarter, down 24.5% to $23.0 billion, with both investment in multi-unit dwellings (-22.6%) and single-unit dwellings (-26.4%) posting sharp declines.
Non-residential investment decreased quarter over quarter, down 10.7% to $13.4 billion. Declines were reported across all provinces and territories, with the largest in Ontario.
Source: Statistics Canada, www150.statcan.gc.ca/n1/daily-quotidien/200821/dq200821b-eng.htm?CMP=mstatcan
