Provincial levels in fourth quarter steady; up on annual basis
Non-residential construction levels in the province surprised many in the fourth quarter of 2015, remaining relatively flat when compared with the same period the previous year at $2.74 billion, according to Statistics Canada.
“Signs of the economic slowdown are all around us in Alberta, but the one surprising indicator where we have yet to see much downturn is construction activity,” said ATB Financial chief economist Todd Hirsch.
“Indeed, if a Martian landed in downtown Edmonton or Calgary today, it might well assume that the province is booming.”
For 2015 overall, total spending was actually up one per cent compared to 2014.
The commercial sector paced all non-residential construction in the fourth quarter. Despite pulling back from $1.83 billion in the third quarter to $1.77 billion, it remained near record highs, and was offset by an increase in industrial construction spending, according to Statistics Canada.
The biggest drop in construction spending came in government and institutional spending. Hirsch, however, believes this category could see some increase in the coming months as the federal government continues to hint at more spending for infrastructure in the spring budget.
Moving forward, Hirsch is cautious about expectations around the province’s non-commercial construction sector.
“Even though industrial and commercial spending showed some impressive results last quarter, both are certain to pull back in 2016,” he said. “With more than enough downtown office space coming onto the market in both major cities, it could be years before construction on yet another office tower is announced.”