Investment in machinery and equipment declined 7.8% in Q4 of 2022.
Canadian business investment has now declined for three consecutive quarters.
According to Statistics Canada, a key driver of the decline is a fall in housing investment:
“Housing investment fell 2.3% in the fourth quarter, the third consecutive quarterly decrease. The decline was widespread across new construction (-1.4%), renovations (-2.6%), and ownership transfer costs (-4.0%). This coincided with higher borrowing costs.”
In the last two quarters of 2022, a more broad decline took place, with investment in a wide range of machinery & equipment falling:
“Business spending on machinery and equipment fell 7.8% in the fourth quarter, the second consecutive quarterly decline. The decline was led by lower spending on computers and computer peripheral equipment, industrial machinery and equipment, and aircraft and other transportation equipment.”
Overall, business investment fell in 2022.
In the face of weakening economic data, the federal government continues to increase taxes and prioritize the expansion of the government over more sustainable private sector growth.
Spencer Fernando
