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Wednesday, February 25, 2004 Private and public investment2004 intentionsBusinesses, governments and institutions intend to allocate more than $223 billion in 2004 for total capital spending on plant, equipment and housing, a 3.1% increase from 2003. First indications are that private sector investment will grow for the first time since 2001. 
A sample survey of 27,000 organizations shows total capital spending in Canada will reach $223.8 billion, compared with the preliminary total for 2003 of $217.2 billion. Between them, Canada's two most populous provinces, Quebec and Ontario, will account for more than one-half of spending in 2004. Intentions in Ontario represent 37% of the total, and intentions in Quebec, 20%. Alberta came in at a close third with 19%, a result of the concentration of the oil and gas industry in that province.
Overall spending on plant and equipment is expected to hit $160.9 billion, up 3.2%. The largest increase can be found in spending by government departments, up 6.7%, mostly from construction at the local government level. After an outstanding year in 2003, housing investment is expected to increase by another 2.7% to $62.9 billion in 2004. Record investments in renovations should more than offset a small decline in the new housing component. Investment in non-residential construction is expected to increase 5.4% to $76.4 billion in 2004, while spending on machinery and equipment is expected to rise 1.3% to $84.5 billion. Private investment turns aroundPrivate spending on plant and equipment is expected to increase 1.7%, to $115.5 billion. This increase is the result of gains of over half a billion dollars from each of three sectors: manufacturing, mining and oil and gas extraction, and information and cultural industries. This is consistent with the Conference Board of Canada's Index of Business Confidence most recently conducted in December for the fourth quarter of 2003. Their respondents showed a newfound willingness to undertake investment: "Almost 63% of respondents indicated that now was a good time to assume investment expenditures, a jump of 18.8 percentage points from last quarter." In manufacturing, the strength is anticipated to come from two areas: refineries, where investment is expected to be up 22.9% to $1.9 billion, and primary metals, where it is expected to nearly double to $2.8 billion on the strength of steel and aluminium spending. In the mining and oil and gas extraction sector, improvements are expected to originate in metal ore mining, where investment is expected to be up 35.4% to $2.1 billion, and in non-conventional oil extraction, up 7.4% to $5.5 billion. Telecommunications is expected to drive the spending increases in the information and cultural industries, with a gain of 9.7% to $6.9 billion. Public investment still outpaces privateSpending by all public organizations is expected to increase 7.2% in 2004, thanks to an anticipated increase of more than $1 billion in public administration and the public component of utilities. Investment is expected to rise more than $500 million in the public component of the transportation industries. Public administration is expected to increase its investment 6.7%, largely from local governments, where a 10.4% increase to $11.4 billion is anticipated. Provincial government departments are expecting a $284 million increase to nearly $6.0 billion. In both cases the increases are concentrated in construction. Investment by utilities will increase largely as a result of a 30.9% increase in water and sewage systems, as well as a 4.8% increase in electric power. In the transportation and warehousing industries, transit and ground passenger transportation is anticipating a 20.2% increase combined with a 10.6% increase in support activities for transportation. Eleven provinces and territories expect gainsInvestment intentions increased in 11 of the 13 provinces and territories. The largest increases are in Newfoundland and Labrador (+10.5%) and New Brunswick (+9.6%). 
Investment in Quebec is anticipated to reach $44.3 billion, up 5.2%. In Ontario, it is expected to hit $82.7 billion, up 2.7%. The largest anticipated decline will likely be in Nunavut, where investment is expected to fall 8.5%. The only other decline is expected in Saskatchewan, down 4.4%. Available on CANSIM: tables 029-0005, 029-0007 to 029-0022, 029-0024, 032-0001 and 032-0002. Definitions, data sources and methods: survey numbers, including related surveys, 2803 and 2804. Private and Public Investment in Canada, Intentions 2004 (61-205-XIB, $38) will be available soon. For more information, or to enquire about the concepts, methods or data quality of this release, contact Les Shinder (613-951-2030; shinder@statcan.gc.ca) or Gilbert Paquette (1-800-571-0494; 613-951-9818; gilbert@statcan.gc.ca), Investment and Capital Stock Division.
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