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Canadian investment in building construction declined in December

Investment in building construction decreased 1.3 per cent to $20.2 billion in December. The residential sector declined 2.1 per cent to $14.6 billion, while the non-residential sector was up 0.8 per cent to $5.6 billion.

On a constant dollar basis (2012=100), investment in building construction decreased 2.0 per cent to $11.6 billion.

Residential sector continues to decline

Investment in residential building construction was down 2.1 per cent to $14.6 billion in December.

Investment in the construction of single-family homes continued to decline for the fifth consecutive month, down 0.5 per cent to $7.8 billion. Alberta (-3.6 per cent) played the largest role in the decline.

Investment in multi-unit construction decreased 3.9 per cent to $6.8 billion. Ontario posted its largest decline (-8.1 per cent) since April 2020, early in the COVID-19 pandemic.

Non-residential construction investment increases for seventh straight month

Investment in non-residential construction was up 0.8 per cent to $5.6 billion in December. Ontario (+2.7 per cent) accounted for most of the growth as it led the gains in each component.

Industrial construction investment increased for the 13th consecutive month, up 2.1 per cent to $1.1 billion. Ontario and Quebec, as well as the overall industry, continued to post record highs.

Commercial construction investment remained relatively stable for the month, up 0.1 per cent to $3.1 billion. The growth in Ontario (+1.7 per cent) offset declines in seven other provinces.

Institutional construction investment increased 1.5 per cent to $1.4 billion and has remained around this value since October 2021. Notably, New Brunswick posted its 7th consecutive increase in this component in December 2022, while Newfoundland and Labrador posted its 14th consecutive drop.

Fourth quarter of 2022 in review

The total value of investment in building construction declined 1.9% to $61.3 billion in the fourth quarter. The residential sector was down 3.4 per cent to $44.8 billion, while the non-residential sector advanced 2.6 per cent to $16.5 billion.

Residential construction investment (-3.4 per cent) had its largest decline since the third quarter of 2021. Similarly, Canada Mortgage and Housing Corporation reported a 5.0 per cent decline in residential construction starts in the fourth quarter of 2022 compared with the previous quarter.

Investment in the construction of single-family homes fell 6.0 per cent to $23.8 billion in the fourth quarter, while the multi-unit component decreased 0.3 per cent to $20.9 billion.

Investment in non-residential construction increased for the seventh consecutive quarter, up 2.6 per cent to $16.5 billion.

Gains across all non-residential components were led by the commercial sector, which increased to a new record of $9.2 billion, surpassing its previous peak, set in the fourth quarter of 2019. Commercial construction investment was up 13.1 per cent compared with the fourth quarter of 2021.

Industrial construction investment rose 5.4 per cent in the fourth quarter of 2022, posting significant gains over the previous four quarters. Notably, Ontario and Quebec saw an increase in this component for the eighth consecutive quarter.

Institutional construction investment increased 1.2 per cent after declining in the previous two quarters. Investment in the institutional component remained relatively unchanged compared with the fourth quarter of 2021.

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