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Resources Sector Investing To Decelerate In 2013

ByThe National Bank of Canada
Published 02/28/2013, 06:43 AM
Updated 05/14/2017, 06:45 AM
TTEF
0.39%
FTNMX551030
-1.85%
NOTE
0.54%

According to a survey released today by Statistics Canada, investment intentions remained positive for 2013, with total non-residential investment expected to rise to a record C$ 293.5 bn this year. However, the C$6.5 bn increase expected for 2013 is not only the smallest since the 2009 recession, but is primarily due to the public sector (+C$4.2 bn) which dwarfed the expected increase in private sector non-residential investment (+C$2.3 bn). As today’s Hot Charts show, it’s quite rare, outside of a recession, that the annual change in private sector investment is lower than that of the public one. The disappointing results came primarily from the resources sector. Of note is the 20% expected drop in investment in the mining sector. The oil and gas sector expects only a 0.8% increase in investments. Uncertainties regarding the global economy (and hence commodity prices) and pipeline expansion projects, likely explain the caution in the resources sector. Private sector intentions outside of the resources sector weren’t stellar either with only a 4.1% increase in investment expected for 2013, the weakest growth rate in three years likely limited by a sub-2% Canadian GDP growth outlook. Investment intentions from the public sector held up relatively well, with two-thirds of the annual increase expected to go into the utilities sector.
Investment in resources sector to decelerate in 2013

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