The global economic downturn is projected to cut private-sector capital spending in B.C. this year by roughly 10% to $27.9 billion.
Investments in the oil and gas, transportation and warehousing sectors in the province are all expected to fall, according to Statistics Canada's annual survey of investment intentions.
Some of the largest declines will be in the oil and gas and mining sectors. The survey projected that weakening oil demand and a record drop in oil prices late last year will result in a 25% drop in oil and gas investments in Western Canada. Oilsands investment is expected to fall 31.1% to $13.2 billion. Investment in the mining sector is projected to drop 26.4% to $5.6 billion as plummeting commodity prices delay development.
The survey said that some of the largest investment cuts in manufacturing will come in the forestry sector, where spending is expected to fall 29%. Investment in manufacturing is projected to fall 8.5% to $18.4 billion.
Overall, capital investments in B.C. this year are expected to be slightly lower than 2007's $28.2 billion.
RBC Economics noted that the continued weak Canadian dollar will also have an impact on investment as a weaker loonie increases the price of imported machinery and equipment, which accounts for about 45% of investment spending.