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Construction investment rebounds as COVID-19 restrictions eased

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Investment in building construction, seasonally adjusted.

The easing of COVID-19 construction restrictions in May, most notably in Ontario and Quebec, has resulted in growth in all components of residential and non-residential investment, reports Statistics Canada.

Total investment in building construction increased 60.1 percent to $13.4 billion in May, partially rebounding from large declines in April. However, investment levels remained 16.5 percent below the level observed in February 2020 prior to the pandemic.

Although all provinces started to reopen their economies—including the construction sectors—in May, Ontario, Quebec and Prince Edward Island made the most impactful policy changes, says Stats Can.

In Ontario, some non-residential construction projects were reopened starting May 4. Additionally, the province moved into Stage 1 of reopening on May 19, which included a full resumption of all construction projects.

In Quebec, all sectors of the construction industry were authorized to resume activity on May 11 under strict guidelines. In Prince Edward Island, new construction projects were permitted to start on May 1, following a five-week work stoppage.

Residential construction up

Investment in residential construction rose 57.0 percent to $8.4 billion in May. Investment in single-unit construction bounced back 71.7 percent to $4.1 billion, exceeding multi-unit growth which increased 45.2 percent to $4.3 billion. Although Ontario and Quebec reported the largest provincial gains for the month, all provinces bounced back somewhat from sharp declines in April. Despite these strong gains, residential investment remained 22.7 percent lower than in February.

Non-residential back on track

Non-residential construction investment increased 65.6 percent to $4.9 billion in May. All three components of non-residential investment increased, with gains in Ontario and Quebec more than offsetting declines in five other provinces.

The commercial component represented the majority of non-residential construction gains, up 99.0 percent to $2.9 billion. Nearly all of the increase was in Ontario and Quebec, with both provinces returning to more regular construction activity, but they still remained slightly lower than February. Manitoba (+0.4 percent) was the only other province to report growth for the month.

Gains in both the industrial (+35.1 percent) and institutional (+32.9 percent) sectors were also led by increases in Ontario and Quebec. Nationally, while reporting notable improvements, industrial and institutional were still down 4.7 percent and 0.8 percent, respectively, from February levels.

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