Rob Roach, ATB ECONOMICS | February 15, 2023

Construction spending down after adjusting for inflation

At the risk of turning into a pillar of salt, today’s Owl looks back at how Alberta’s construction sector performed in 2022 compared to previous years.

On a constant dollar basis,* total spending on the construction and renovation of buildings in Alberta came in at $17.2 billion last year.

This was 1.4% below what was spent in 2021 and a whopping 38.4% less than in 2014.

In contrast to Alberta, national constant dollar spending on construction in 2022 was only 0.1% lower than in 2014. This highlights the extent of the pullback in activity in Alberta since the end of the last economic boom in the province.

Annual residential spending in Alberta was down by 3.0% compared to 2021 while non-residential spending was up by 1.7%.

On the back of a strong increase in the non-residential category, inflation-adjusted building construction spending in Calgary was 6.2% higher in 2022 than in 2021.

It was a different story in Edmonton, with total annual spending down by 8.0%. 

The impact of inflation in the construction sector is evident when we consider that annual construction spending in Alberta in current rather than constant dollars was 15.8% higher in 2022 than in 2021.

Without adjusting for inflation, national spending was 11.3% higher in 2022 than in 2021, but 3.5% lower in constant dollars.

*Monthly estimates in constant dollars are calculated using quarterly deflators from the Building Construction Price Index (table 18-10-0135-01).

Answer to the previous trivia question: YouTube was launched on Valentine's Day in 2005.

Today’s trivia question: In what year was the Calgary Tower (née Husky Tower) completed?