By 2028, New Brunswick will reverse the negative trend in real non-residential private sector investment and will reach 2007 levels once more.
OVERVIEW
Problem
In 2007, non-residential private sector investment per capita in New Brunswick reached an all-time high of $7,569, after which it began to decline. In 2015 and 2016, investment was 34% and 36% lower than in 2007. However, in 2017 and 2018 there was an increase of 18% and 19% from the 2016 value respectively. This may indicate an end to the decade long negative trend as nonresidential private sector investments per capita begins to rise.
Cause
Non-residential investment from the private sector (also known as the commercial sector) refers to capital expenditures on plants, equipment, and other assets used in the production of goods and services. This does not include investments in the residential sector, such as expenditures on home renovations, or investments from government and non-profit organizations. During the 2008 recession, nonresidential capital investment declined across the globe. In Canada, investment further declined in 2015 and 2016 as oil
prices fell. These trends also impacted New Brunswick.
Importance
Non-residential private sector investment is an important economic driver because it determines levels of labour productivity and labour demand.
Recommendation
Non-residential private sector investment can be increased through higher production and exportation of goods and services.
