Residential construction investment declined for the fourth straight month
Investment in Canadian residential construction declined in June, with a 4.5% monthly drop to end up at around $12.1 billion, according to the national statistics agency.
This marked the fourth consecutive month of declines for this component. Overall investment in building construction fell by 3.1% to $18 billion in June.
Significant slowdown registered in Ontario (with a 5.8% drop to $5.1 billion) drove most of the June deceleration in residential construction investment, Statistics Canada said.
Single-family home construction declined by 5.7% to $6.2 billion in June, with eight provinces reporting deceleration.
Multi-unit construction investment also fell for the eighth straight month, with a 3.1% drop to $5.9 billion. The June reading was the lowest level for the building type since September 2021, StatCan said.
The lethargy was even more pronounced when seen on a quarterly basis, with the 5.2% drop in overall building construction investment (down to $55.7 billion) in Q2 largely driven by residential construction slowdown (down by 8.2% to $37.9 billion).
“Investment in single family homes fell 10.5% to $19.7 billion in the second quarter, the largest decline since the second quarter of 2020,” StatCan said. “Multi-unit construction declined for the third straight quarter, falling 5.7% to $18.2 billion in the second quarter of 2023.”
Canadian Home Builders' Association warns of slower home starts due to rising construction costs from recent rate hikes. Chief Executive Kevin Lee calls for government action to offset the impact.https://t.co/UhRksMGfRd#mortgagenews #mortgageindustry #ratehike #interestrates
— Canadian Mortgage Professional Magazine (@CMPmagazine) July 24, 2023
Non-residential construction also takes a hit
Investment in non-residential construction edged down by 0.2% to $5.9 billion in June, largely spurred by what StatCan described as “widespread declines” in Quebec. The market registered a 3.1% decline to $1.3 billion during the month.
“Commercial construction was up 0.8% to $3.3 billion in June, while industrial (-1.4% to $1.2 billion) and institutional (-1.4% to $1.4 billion) construction both declined,” StatCan added.
