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November 30, 2021NON-RESIDENTIAL FIXED CAPITAL INVESTMENT, Q3 2021 With Q3 reference results, year-over-year (Q3 2021 vs Q3 2020) and year-to-date (Q1-Q3 2021 vs Q1-Q3 2021) are showing the rebounds in economic activity from the unprecedented declines observed at the start of the COVID-19 pandemic.
Non-residential fixed capital investment consists of expenditures made by business, governments and non-profit institutions serving households that add to the capital stock for production of goods and services in an economy. Investment that are included are buildings, engineering construction (i.e. bridge, mine structure), machinery and equipment, and intellectual property products (i.e. software, mineral exploration) but it doesn’t include non-reproducible assets (lands, mineral deposits, natural resources) or housing investment. Statistics Canada has begun to release quarterly data on non-residential fixed capital investment and stock for the provinces with historical data back to 2013. Note, the data is not seasonally adjusted and expressed in current prices.
Nova Scotia non-residential investment has trended upwards since Q1 2013, rising from $1,201 million in Q1 2013 to $1,631 million in Q1 2020. Non-residential investment declined in Q2 2020 but increased to $1,722 million in Q4 2020.
In Q3 2021, investment in Nova Scotia's fixed capital rose 13.2% from the previous quarter to $1,755 million. Business sector non-residential investment declined in 2020 while non-residential investment grew in the government sector. Government and non-profit institution serving households was mostly flat from 2013 through 2017 but has been at a higher level from 2018 through Q3 2021.
Within the business sector, machinery and equipment account for the largest share of fixed capital investments. Compared to Q3 2020, business sector investment increased 5.2% with increases in all types of activity: non-residential buildings (+1.3%), engineering construction (+15.9%), machinery and equipment (+4.8%) and intellectual property products (+1.5%). Compared to Q3 2019, business sector investment is 11.6% lower with declines in non-residential buildings (-12.4%), engineering construction (-13.8%), machinery and equipment (-14.4%) and intellectual property products (-1.4%).
Government investment in machinery and equipment rose through 2018 and remained at an elevated levels averaging above $300 million per quarter through 2020 and the first three quarters of 2021. Government and non-profit investment in machinery and equipment fell in Q3 2021 compared to the same period one year ago by 10.3%. All other types of investment were higher for Q3 2021 than Q3 2020 for government and non-profit institutions: non-residential buildings (+14.3%), engineering construction (+13.4%), and intellectual property products (+0.7%).
PROVINCES NON-RESIDENTIAL INVESTMENT: Q3 2021 vs Q3 2020
Nova Scotia non-residential investment (all sectors, all assets) increased 4.4% from Q3 2020 to Q3 2021. Non-residential investment increased in all provinces from the previous year in Q3 2021. Nationally non-residential investment was up 8.5% with Newfoundland and Labrador (+11.0%) posting the largest increase and Nova Scotia posting the smallest gain.
Business sector investment in Nova Scotia increased 5.2%. The business sector in Newfoundland and Labrador (+11.2%) reported the largest increase while the business sector in Prince Edward Island (+4.1%) reported the smallest increase.
Government and non-profit fixed capital investment increased in every province. Alberta (+10.9%) and Saskatchewan (+10.8%) posted the largest gain while Nova Scotia (+3.7%) reported the smallest increase.
Compared to Q3 2020, non-residential investment in buildings was up 8.4% in Nova Scotia, which was the strongest growth among provinces. National investment in non-residential building construction was up 5.4% with the slowest increases in Ontario and Saskatchewan (both +4.6%).
Engineering structure investment was up 14.3% in Nova Scotia. Investment in engineering structures was up 15.6% nationally with every province reporting year-over-year increases in Q3 2021. Newfoundland and Labrador, Saskatchewan, Alberta and British Columbia reported the strongest growth at 15.9% while Prince Edward Island (+14.1%) had the smallest increase.
Machinery and equipment investment increased 4.9% in Canada with all provinces except Nova Scotia recording gains. Machinery and equipment investment fell 3.2% year-over-year in Nova Scotia. The strongest growth was reported in Prince Edward Island (+6.8%).
Intellectual property products increased 1.5% in Nova Scotia over Q3 2020. Intellectual property investment was up 2.6% in Canada with all provinces recording gains led by Newfoundland and Labrador (+4.8%). Nova Scotia and New Brunswick (+1.5%) reported the smallest increase.
NOVA SCOTIA (Q1-Q3 2021 vs Q1-Q3 2020)
Non-residential investment in Nova Scotia increased 5.2% for the first three quarters of 2021 compared to the same period of 2020. Business sector investment is up 3.1% (+65.0 million) and the government and non-profit institution sector is up 6.7% (+178.0 million). Business sector investment rose for engineering construction (+0.9%), machinery and equipment (6.1%) and intellectual property products (+3.4%) while it fell for non-residential buildings (-1.5%). For the government and non-profit sector, all types of investment have increased with engineering (+14.3%) and non-residential buildings (+11.0%) seeing larger increases than machinery and equipment (+1.0%) and intellectual property products (+2.7%).
Statistics Canada. Table 34-10-0163-01 Flows and stocks of fixed non-residential and residential capital, by sector and asset, provincial and territorial (x 1,000,000)