Capital outlook on strong footing in 2023
Most of the aggregate boost is coming from the oil and gas extraction industry
By Siddhartha Bhattacharya, ATB Economics 2 March 2023 1 min read
According to new Statistics Canada data, capital spending intentions* remain upbeat in Alberta and are expected to grow for the third straight year in 2023.
After an estimated $7.8 billion (+14.0%) increase in 2022, total non-residential spending in the province is expected to rise by another $410 million (0.6%) this year to reach the highest level since 2015.
Most of this aggregate boost is coming from the oil and gas extraction industry, where investment is expected to jump $2.4 billion (+9.8%) in 2023 and finally surpass the pre-pandemic level set in 2019.
Largely due to improvements in petroleum and coal products and chemicals, capital expenditures in Alberta’s manufacturing (+26.7%) sector are also poised for a sharp rebound this year after a lackluster performance in 2022.
Meanwhile, investment intentions are up $13.1 billion (+4.3%) nationally with Ontario and Quebec driving for over two-thirds the increase.
Despite a modestly favourable investment outlook, it is important to remember that businesses are still facing pressures that include elevated inflation, high borrowing costs, extremely volatile global conditions and labour shortages.
*The Capital and Repair Expenditures Survey is based on a sample survey of 27,000 businesses, governments and institutions. The survey on preliminary estimates for 2022 and intentions for 2023 was conducted from September 2022 to January 2023.
Answer to the previous trivia question: The month of March is named for Mars, the Roman god of war and was originally the first month of the Roman calendar.
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