One of the measures of economic growth is capital investment. This covers a lot of activity – spending on plants, equipment or technology – but the most visible part is construction.
We break down that segment a bit further to look at spending on residential construction and on business construction spending. This generally falls into two categories – industrial or commercial – and then the last segment is institutional, which means government construction projects.
When Saskatchewan was at the peak of the boom a few years ago, this was the category that was booming. Investment in new or expanding potash mines added to spending in the oil patch which, in turn, led to massive development of buildings to house firms that supported the resource sector growth.
Things are much quieter now, but we are seeing some signs of changing investment patterns on this front. The latest figures – for Q2 of this year – are softer than they have been in a year. But the one positive area is industrial – spending there is up – while the biggest pull back is in investment by government.