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August 31, 2021NON-RESIDENTIAL FIXED CAPITAL INVESTMENT, Q2 2021 With Q2 reference results, year-over-year (Q2 2021 vs Q2 2020) and year-to-date (Q1-Q2 2021 vs Q1-Q2 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 $1,568 million in Q4 2019. Non-residential investment declined in the first half of 2020 but increased to $1,495 million in Q4 2020. Investment in Nova Scotia's fixed capital declined 0.2% from the previous quarter to $1430 million in Q2 2021. Business sector non-residential investment has declined to a greater extent in 2020 than 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 over from 2018 through Q2 2021.
Within the business sector, machinery and equipment account for around half of fixed capital investments. Compared to Q2 2020, business sector investment increased 9.7% with increases in all types of activity: non-residential buildings (+7.5%), engineering construction (+3.1%), machinery and equipment (+12.6%) and intellectual property products (+9.8%).
Government investment in machinery and equipment rose through 2018 and remained at an elevated levels above $200 million per quarter through 2020 and the first half of 2021. All types of investment were higher for Q2 2021 than Q2 2020 for government and non-profit institutions: non-residential buildings (+11.2%), engineering construction (+19.3%), machinery and equipment (+2.5%), and intellectual property products (+3.6%).
PROVINCES NON-RESIDENTIAL INVESTMENT: Q2 2021 vs Q2 2020
Nova Scotia non-residential investment (all sectors, all assets) increased 9.2% from Q2 2020 to Q2 2021. Non-residential investment increased in all provinces from the previous year in Q2 2021. Nationally non-residential investment was up 9.9% with Quebec (+11.5%) posting the largest increase and Newfoundland and Labrador (+7.6%) posting the smallest gain.
Business sector investment in Nova Scotia increased 9.7%. The business sector in Quebec (+10.8%) reported the largest increase while the business sector in Newfoundland and Labrador (+6.1%) reported the smallest increase.
Government and non-profit fixed capital investment increased in every province. Prince Edward Island (+15.2%) posted the largest gain while Nova Scotia (+8.7%) reported the smallest increase.
Compared to Q2 2020, non-residential investment in buildings was up 9.4% in Nova Scotia. National investment in non-residential building construction was 9.0% with all provinces reporting similar increases.
Engineering structure investment was up 11.9% in Nova Scotia. Investment in engineering structures was also up in every province in Q2 2021. Prince Edward Island (+12.2%) reported the largest increase and Newfoundland and Labrador (+5.3%) had the smallest increase.
Machinery and equipment investment increased 13.7% in Canada with all provinces recording gains. Nova Scotia (+9.2%) reported the smallest increase with all other provinces reporting at least 13% growth .
Intellectual property products increased 6.3% in Nova Scotia. Intellectual property investment was up 10.2% in Canada with all provinces recording gains led by Quebec (+12.3%). Prince Edward Island (+5.6%) reported the smallest increase.
NOVA SCOTIA (Q1-Q2 2021 vs Q1-Q2 2020)
Non-residential investment in Nova Scotia increased 3.1% for the first half of 2021 compared to the first half of 2020. An increase in the government and non-profit institution sector (+$110 million; +8.9%) has offset lower business investment (-$22 million, -1.4%). For the government and non-profit sector, all types of investment have increased with engineering (+14.9%) and machinery and equipment (+11.8%) seeing larger increase than non-residential buildings (+5.9%) and intellectual property products (+2.8%). Within the business sector, engineering construction had the largest decline (-8.9%). Smaller declines in business non-residential buildings (-1.0%) and machinery and equipment (-1.7%) occurred over the first half of 2021. So far in 2021, business investment in intellectual property products (+7.0%) has increased.
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)
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