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Building construction investment down

Building construction investment down

Posted on: 5/23/2019 | Author: ATB Financial's Economics + Research Team

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In addition to being an important contributor to the economy, building construction is also an indicator of overall economic health. The construction of new commercial buildings, for example, is a sign businesses need more space to expand their operations.

Unfortunately, building construction investment in Alberta has contracted for the ninth time in twelve months, pointing to overall weak economic growth.

Spending on the construction of buildings in March was down 4.9 per cent compared to February, 23.0 per cent compared to the previous March, and 38.3 per cent compared to March 2014, before the recession hit. (All of the numbers in this edition of The Owl have been adjusted for seasonal variation and inflation.)

Nationally, monthly building construction spending fell by 1.4 per cent in March, 7.9 per cent year-over-year, and 4.2 per cent compared to March 2014.

Year-over-year residential building construction in Alberta was down by 35.5 per cent. Non-residential building construction also fell, but by a more modest 3.2 per cent.

On a national level, investment in the construction of multi-family units surpassed single-detached dwellings for the first time in March (note that this refers to spending not the number of units built).

In Alberta, however, spending on single-detached houses remained greater than spending on multi-family units, with singles accounting for 55.1 per cent of total residential investment in March. Multi-family investment in Alberta did manage to outpace single-detached investment once in the last ten years. It did so in February 2016 when it represented 50.5 per cent of total residential investment.

 

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