MNI:Public Sector Leads Canada 2018 Non-Res Capex Intentions>

By Yali N'Diaye

     OTTAWA (MNI) - Non-residential construction and machinery and 

equipment capital spending is expected to increase 0.8% this year, led 

by the public sector, Statistics Canada reported Wednesday. 

     Spending on machinery and equipment is expected to rise 3.5%, while 

it is anticipated to decline 0.6% in construction. 

     Public capital expenditure intentions are up 4.1% for 2018, 

following an increase of 13.9% in 2017. 

     In the private sector, however, businesses are expected to reduce 

spending by 1.1% from 2017, which would be the fourth consecutive 

decline. 

     Regionally, intentions are up in five provinces, led by Ontario, 

which is of note since the province, a large exporter to the U.S., is 

particularly exposed to the outcome of the North American Free Trade 

Agreement renegotiations. 

     --PUBLIC ADMINISTRATION LEADS 

     Within the public sector, the annual non-residential capital and 

repair expenditure survey showed public administration was the largest 

contributor. 

     Public administration spending intentions are up 6.5% in 2018.  

     Capital expenditures are expected to increase across all levels of 

public administration, the agency said: federal, provincial and 

territorial and local, as well as municipal and regional. 

     --PRIVATE SECTOR DECLINES 

     Conversely, capital spending intentions in the private sector are 

down for the fourth consecutive year. 

     A 12% drop in oil and gas extraction is the main contributor, 

mainly due to non-conventional oil extraction. 

     On the other hand, capital spending in the manufacturing sector is 

expected to rise 6.2%, a positive for the Bank of Canada, especially 

given the ongoing threat that NAFTA represents for Canada's 

manufacturing, notably auto, sector. 

     Elsewhere, intentions are up in retail trade but down in wholesale 

trade. 

--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

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