Strong Residential Sector Leads Construction Investment

Total investment in building construction increased 4.2 per cent to $16.8 billion in February, posting a record high for the second consecutive month because of continued strength in the residential sector, says Statistics Canada. Approximately half of the gain was due to price increases which likely reflects rising demand and tightening supply for building materials since the start of the COVID-19 pandemic. Consecutive record levels have been reported for investment in residential construction since September 2020, reaching a new high of $12.3 billion in February. The majority of this growth stemmed from single-family home construction, which rose for a fifth consecutive month, up 9.4 per cent to $6.7 billion in February. Single-family homes being built in census metropolitan areas (CMAs) continued to drive the growth; however, record highs were set both in and outside CMAs. Investment outside CMAs increased 37.6 per cent compared with February 2020, the largest year-over-year increase this component has reported since comparable data were available, back to 2011. The strength of single-family home investment in recent months may be partly attributable to an increased demand for more living space as Canada approaches the end of the first year of the COVID-19 pandemic. Multi-unit construction investment also rose in February, up 1.6 per cent to $5.7 billion. Non-residential construction investment was little changed for a fifth consecutive month, edging up 0.2 per cent to $4.5 billion in February.