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Investment in building construction down in March

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Investment in building construction, seasonally adjusted.

Total investment in building construction decreased by 3.6 per cent to $15.4 billion in March, with declines in both residential and non-residential investment. The COVID-19 restrictions negatively affected construction in March, especially in Quebec which shut down all non-essential building construction on March 25.

National declines coincided with a drop in construction hours in March, as reported by Statistics Canada’s Survey of Employment, Payroll and Hours.

On a quarterly basis, total investment edged up one per cent in the first quarter compared with the fourth quarter of 2019.

Quebec and British Columbia contributed to the majority of declines in residential construction investment in March, outweighing gains in six other provinces. Quebec reported its largest decrease since the beginning of the current series in 2010, down $462.9 million for the month.

The overall decline in residential investment in March was driven by multi-unit dwellings, which fell 6.9 per cent to $5.2 billion. Six provinces posted declines, with the largest decrease in Quebec.

Investment in single-unit dwellings rose slightly in March, up 0.6 per cent to $5.3 billion. Ontario led in provincial gains, up 5.8 per cent to $2.4 billion, bouncing back from a six per cent drop from September 2019 to February 2020. Quebec, New Brunswick, and Manitoba were the only provinces to post declines in single-unit construction investment in March.

Industrial, commercial, and institutional investment decreased in March, leading to the first overall decline since November 2018. Prince Edward Island was the only province to report growth in non-residential investment for the month, up 1.4 per cent to $18.8 million. The increase was driven, in part, by the expansion of BioVectra’s manufacturing facility in Charlottetown.

Despite a slow March, all three components of non-residential investment increased in the first quarter of 2020. Commercial investment increased 1.8 per cent to $8.9 billion, while institutional investment edged up 0.3 per cent to $3.4 billion and industrial investment rose 0.5 per cent to $2.7 billion.

In the first quarter, total investment in building construction increase one per cent, or $445.8 million, compared with the fourth quarter of 2019. Ontario led the provinces in investment growth for the quarter, despite reporting a sharp decline in March. In contrast, Manitoba and British Columbia reported the most significant declines for the quarter.

Residential investment increased in the first quarter, up 0.8 per cent to $32 billion, with increases in multi-unit dwellings outpacing those in single-unit dwellings. Multi-unit construction investment has outpaced single-unit dwellings for eight out of the last 10 quarters. Quebec and Ontario reported the largest gains in residential construction, while Manitoba posted a notable decline for the quarter.

Non-residential investment increased quarter over quarter, up 1.2 per cent to $15 billion. Ontario and Quebec had the strongest growth, while British Columbia, Alberta and Saskatchewan reported the largest declines.

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