Stronger business investment should offset the impact of slower U.S. growth

Posted by Rumin Mann
August 31st, 2011

Heading into the second half of 2011, there is solid evidence that business non-residential construction is making a significant contribution to economic growth in Canada despite the fact that the federal government’s infrastructure stimulus program expired on March 31, 2011.

This observation is based on the fact that, according to Statistics Canada, the constant dollar value of total investment in non-residential construction was up by 3.4% y/y in the second quarter of 2011 due to solid gains in spending on commercial projects (+8.6%) and industrial projects (+6.6%).

This was despite a 6.2% drop in spending on institutional projects including schools, hospitals and public administration structures.

This evidence of stronger business non-residential investment is also supported by the fact that over the past three months (April to July) total construction employment in Canada has increased by 36,200 compared to a gain of 3,800 during the same period in 2010.

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