Canadian spending on construction, machinery and equipment this year may rise at the slowest pace since the last recession in 2009 as a boost from pipelines is curbed by a drop for retailers, according to a federal survey.
Investments may rise 1.4 percent to C$404.5 billion in 2014, according to the annual survey of public and private organizations reported today by Ottawa-based Statistics Canada. The gain is lower than the 2013 estimate that was pared today to 1.5 percent from 1.7 percent.
Bank of Canada Governor Stephen Poloz is counting on business investment and exports to lead a rotation of growth away from indebted consumers and governments. The world’s 11th largest economy won’t reach full output for about two years in part because of sluggish investment, according to a January central bank forecast that may be updated at a March 5 interest-rate decision.
“Today’s numbers can only be viewed as disappointing for an economy that needs investment to pick up to drive stronger growth,” Toronto-Dominion Bank economist Leslie Preston wrote in a note to clients.
Private sector investment intentions rose 1.3 percent to C$315.2 billion, the survey said. Public sector investment is seen increasing 1.9 percent to C$89.3 billion.
Pipeline investments may jump 36 percent to C$9.2 billion, leading a 15 percent rise in the transportation and warehousing category to C$27.3 billion, Statistics Canada said. Retailing investments are projected to decline 11 percent to C$9.1 billion from a record high the prior year.
Non-residential construction will fall 0.2 percent to C$185.4 billion and spending on machinery and equipment will increase 3.9 percent to C$112.0 billion, the survey showed.
Housing may gain 1.8 percent to C$107.1 billion, the report said, a figure based on data from Canada Mortgage & Housing Corp., another federal agency.
The survey of 25,000 public and private organizations was taken from October to late January, Statistics Canada said.