Energy slump is still holding back Canada's investment plans

By Greg Quinn on 2/28/2018

OTTAWA (Bloomberg) -- Canadian business investment is being weighed down for a fourth straight year by weakness in Alberta’s energy industry.

Spending plans for oil and gas capital projects this year are down 12% to C$33.2 billion from 2017, according to a Statistics Canada survey published Wednesday in Ottawa. The spending total has declined in each of the last four years from a peak of C$76.1 billion. The province of Alberta was the biggest contributor to the decline.

Weakness in energy limited the gain in overall spending on non-residential construction and machinery and equipment to 0.8% for 2018, to C$238.6 billion. That’s a slowdown from the 2017 increase of 3% and still below the total of C$272.1 billion set in 2014 before a plunge in crude oil prices.

Business investment has been one of the weak spots in a broad Canadian economic expansion, with growth being led more by government and consumer spending.

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