Canada: Will the investment rebound extend to 2018? - NBF

The rebound of Canadian business investment spending, which started last year, seems to have legs, according to analysts at NBF.

Key Quotes

“At least that’s the message from Statistics Canada’s latest annual report on planned capital expenditures which showed respondents having positive investment intentions, with total non-residential investment expected to rise to a 3-year high of C$238.6 bn in 2018. The 0.8% increase from last year is entirely due to the public sector (+4.1%) which is slated to offset a 1.1% decrease in the private sector, the latter’s decline largely attributed to mining, quarrying and oil & gas extraction which continue to be impeded by low commodity prices.”

“Excluding those resources, private sector investment spending is actually projected to rise 2% this year, the largest increase since 2014. Higher investment is planned in manufacturing, retailing, and real estate among others. One caveat from the report, however, is that the survey was conducted between September last year and January, and hence data was largely collected before changes to U.S. tax policy (which arguably made Canada relatively less competitive).”