Highlights
- According to Statistics Canada, non-residential investments topped $1.1 billion in the Québec City census metropolitan area (CMA) in 2014, down 3.4% from the all-time high recorded in 2013.
- The increase in capital expenditures in the institutional sector (+2.8%) was not enough to offset the decline in the industrial (-18%) and commercial (-2.9%) sectors.
- The value of non-residential building permits fell by 38.9% in the Québec City region in 2014 compared with 2013, to a total of $481.3 million.
Commentary
The commercial sector invested $846 million in the Québec City region last year (an annual drop of 2.9%). Attention was focused on the launch of Carrefour St-Romuald. In early 2015, a number of closure announcements shook the industry although major shopping centres were quick to react by announcing firm plans to modernize their infrastructure. In addition, Québec City is a commercial hub serving various regions in Eastern Québec—a role that is sure to support future investment projects.
The institutional market generated $181 million in expenditures in 2014, up 2.8% from 2013. Nearly a dozen projects were brought to completion, adding more than one million sq. ft. of office space. The low vacancy rate and favourable returns on investment augur well for the launch of new projects in 2015. Work began recently on a number of projects while several others are in the final stages of the pre-leasing process in Lebourgneuf, Ste-Foy and Lévis.
The industrial sector invested $85 million in capital investments last year, down 18%. Amid signs of recovery, local manufacturers seem likely to boost their expenditures in 2015. An increase in new orders, combined with opportunities associated with the expansion of the St. Augustin industrial park and the completion of the Michelet Innovation Space, all bode well for capital spending.
In a nutshell, for the second year in a row, over one billion dollars was invested in the region in 2014, a pattern that looks likely to be repeated in 2015. However, a 12.2% drop in the value of building permits in 2014 suggests that future projects will be starting more gradually, particularly in the second half of the year.
Louis Gagnon
Senior Economist
Québec International
