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New data show that investment in non-residential construction in Alberta fell for the seventh consecutive quarter to end 2016. The numbers also show that total investment slipped to levels last seen at the end of 2013.
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ATB Financial's Economics & Research Team January 17, 2017
Investment in non-residential buildings falls for seventh consecutive quarter
New data show that investment in non-residential construction in Alberta fell for the seventh consecutive quarter to end 2016. The numbers also show that total investment slipped to levels last seen at the end of 2013.
 
Between October and the end of December, builders in our province spent $2.5 billion on commercial, industrial and institutional construction projects. The figure is adjusted for seasonality and is calculated in current dollars. The fourth and final report of the year showed a decline of just over one per cent from the previous quarter and a 9.1 per cent drop over the fourth quarter of 2015.
 
Expectedly, the drop in non-residential investment has to do with Alberta’s industrial and commercial sectors. Construction of factories and power plants showed the biggest investment weakening from the previous year. Within the industrial category, investment fell 43.6 per cent compared to the final three months of 2015. Commercial projects such as office towers, shopping malls and business parks also fell considerably over the year (-12.6 per cent).
 
Institutional and governmental construction spending was the only category that remained positive throughout all of 2016. Spending on the construction of schools, hospitals and other institutional buildings in the fourth and final quarter grew by 41.5 per cent (year-over-year).
 
Many are anticipating an uptick in non-residential construction this year. However, construction will be at a much slower pace than in previous years. 
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