Sask. investment to rise 6.7%
Bruce Johnstone, The Leader-Post; with files from CanWest News Service
Published: Friday, February 24, 2006
Private and public sector investment in Saskatchewan this year is expected to increase 6.7 per cent to $8.3 billion -- fourth highest among the provinces, Statistics Canada said Thursday.
Last year, Saskatchewan was projected to lead all provinces with a 12.6-per-cent increase in investment intentions to $8.5 billion. But actual capital investment increased only 4.6 per cent to $7.8 billion from $7.5 billion in 2004.
This year, Saskatchewan investment intentions are ahead of the national average of 6.1 per cent, but behind Manitoba at 14.6 per cent, Nova Scotia at 10.6 per cent and Alberta at 91/2 per cent.
Mining and oil and natural gas extraction account for most of the increased investment, with spending expected to increase to $2.7 billion this year from $2.3 billion in 2005.
Manufacturing investment is also expected to increase to $377 million from $298 million in 2005, but utilities investment is expected to decline to $412 million from $627 million in 2005.
A spokesman for Saskatchewan Industry and Resources said the projected 6.7-per-cent increase in capital spending is "pretty solid. We view that as a positive forecast,'' Roy Schneider said.
Schneider noted Saskatchewan also boasts the third-highest projected growth in private-sector investment for 2006 at 9.2 per cent versus flat spending in the public sector.
Nationally, StatsCan said capital spending will remain robust this year thanks to the booming energy industry, but investment growth will be at a slightly slower pace than last year.
The survey of 29,000 businesses, governments and institutions over the last few months found total capital spending will reach $281.6 billion this year, up 6.1 per cent from 2005. This was a full percentage point below last year's rise in spending of 7.1 per cent from 2004.
Private and public spending on plants and equipment should reach $207 billion in 2006, up 8.2 per cent from last year, the survey found. This is a slightly faster rate of growth than the 7.6-per-cent gain in 2005.
At the same time, Canada's housing market is expected to remain virtually stable, with investment forecast at $74.6 billion, compared with $74.2 billion in 2005, it said.
High prices for oil, natural gas and electricity, and strong corporate profits, are expected to result in a surge in investment in the exploration for new energy sources, and in the upgrading and expanding of existing operations.
Investment by companies in the oil and gas extraction sector will reach an estimated $39.2 billion in 2006, up $2.5 billion from 2005.
Meanwhile, total investment by Canada's utilities, which includes electric power, natural gas distribution and "water and sewage and other systems," is expected to jump considerably this year.
Utilities are expected to invest $17.5 billion in 2006, up 27.8 per cent from 2005.
But it will be public transportation that will see capital spending grow at an unprecedented rate, according to the survey.
Total spending in the transit and ground passenger industry is expected to hit $3.3 billion, up a whopping 50.3 per cent from last year.
Spending in the pipeline transportation industry is anticipated at $2 billion in 2006, a gain of 83 per cent over last year.
The survey found manufacturers plan a moderate increase of 3.4 per cent in investment this year to $20.6 billion, with almost all the increase related to plant construction.
Investment in machinery and equipment -- key to Canada's competitiveness in the global marketplace -- is expected to hold at 2005 levels.