Capital spending. It’s the lifeblood of the construction in-dustry
– horizontal construction is no exception – and
we now have a feel for what the coming year will hold.
And it fits the landscape – flat.
First, the national situation and then how this province differs.
Before that, however, a little background on how StatsCan comes up
with the numbers we share in this column.
Early each year, the federal agency polls more than 100,000 orga-nizations
(public and private) asking what they actually spent on
capital items (construction, plant, equipment and technology) last
year and what they intend to invest this year. Then, usually in the
last few days of February, they release their updated findings.
Nationally, organizations plan to spend nearly one per cent more
than last year (which was up three per cent) and the bulk of that im-provement
will come from the public sector, where every level of
government ( federal, provincial, territorial, regional and local) is set
to expand its investment, especially on construction. This includes
everything from infrastructure such as roads to institutional build-ings.
The private sector component of this segment also includes
commercial and industrial property development or improvements.
BY PAUL MARTIN, MARTIN CHARLTON COMMUNICATIONS
THE BOTTOM LINE
In contrast, the big decline will be in the oil patch, notably in
Alberta and Newfoundland, marking the fourth year in a row this
number has contracted. Saskatchewan, though, is the outlier and
will remain virtually the same as last year. Alberta will be down 12
per cent to $22 billion, Newfoundland is expected to post a 31 per
cent reduction and even B.C. will see a drop of nine per cent, while
we in Saskatchewan move down less than one per cent. On this
one, we are somewhat out of step with other oil and gas produc-ing
regions of the country. While that is unexplained in the new
report, it might be that we cut deeper and faster than the indus-try
in other provinces earlier in the downturn and have the worst
The real critical numbers, though, are for this year. Saskatchewan
is expected to witness capital or balance sheet spending of $10 bil-lion
on construction and a further $4 billion on equipment and
technology this year. Both those are roughly equal to what we saw
over the past two years. So, for anyone looking to generate a forecast
for the coming year, the actual results of the past two construction
seasons provide a wonderful starting point as we should expect to
see “more of the same” in 2018.
the Year Ahead
Capital Spending: Actual and Intended
2015 2016 2017 2018 % change
Saskatchewan 16,846.5 15,117.7 14,700.9 14,345.7 -2.4
Non-residential construction 11,191.1 10,845.2 10,119.2 10,048.8 -0.7
Machinery and equipment 5,655.4 4,272.5 4,581.8 4,296.9 -6.2
NIKOLAMIREJOVSKA / 123RF STOCK PHOTO
48 Think BIG | Quarter 2 2018 | saskheavy.ca