Canada’s building construction investment remained virtually flat in August, with higher prices masking a mild slowdown in real activity. Total construction spending increased by 0.1 percent to $22.8 billion, while in constant dollars, adjusted to 2023 = 100, investment decreased by 0.1 percent to $21.2 billion. Year over year, total investment rose 8.7 percent in nominal terms and 5.0 percent after inflation.
The figures show that much of the monthly increase reflects higher material and labour costs rather than an expansion in construction work. The sector continues to face elevated interest rates and credit constraints that are limiting new project starts.
Residential investment increased slightly by $10.5 million to $16.0 billion in August. Single-family construction rose 2.8 percent, or $202.1 million, to $7.4 billion, while spending on multi-unit housing declined 2.2 percent, or $191.6 million, to $8.7 billion.
Non-residential construction showed a similarly uneven picture. Investment increased by $22.9 million to $6.8 billion, with modest gains in commercial and institutional building, partly offset by another decline in industrial projects. Commercial investment rose 0.8 percent to $3.3 billion, due to new developments in Ontario. Institutional investment also increased 0.8 percent to $2.1 billion, led by Alberta’s public-sector spending. Industrial construction fell 1.4 percent to $1.3 billion due to the decline in Quebec (–$8.7 million), British Columbia (–$6.3 million) and Alberta (–$4.7 million).
The stagnation in constant-dollar terms highlights a cooling phase for Canada’s building industry. Despite year-over-year gains in nominal spending, real growth has flattened, showing that inflation continues to absorb much of the sector’s activity. Private industrial investment is tapering off after several years of expansion tied to warehousing, energy and manufacturing projects. Meanwhile, single-family housing and institutional construction are providing limited support, but not enough to signal a broader recovery.