Canadian businesses expect to increase investment by 8.4% in 2005 to $188.3 billion, according to a new report on private and public investment released today by Statistics Canada.

“Robust profits, high oil prices, infrastructure improvements and an increase in manufacturing investment should all combine to produce the largest boost to investment intentions in recent years,” StatsCan said.

StatsCan said the lift to business investment comes just as spending on housing appears to be leveling off. All together, investment should increase 6.0% to $258.6 billion, the government agency said.

Housing is expected to remain virtually unchanged in 2005 at just over $70 billion. The expected decline in housing starts will be offset by higher house prices and the strength in the renovation segment.

StatsCan said the non-conventional oil extraction industry, buoyed by prices that ensure the feasibility of many new projects, is the largest contributor to growth in the mining and oil and gas sector with an increase of $2.4 billion. This increase, combined with just over $1 billion from the conventional industry and another $562 million from mining help push the sector up 12.2% to $37.7 billion.

Manufacturing investment, which has been lacklustre in recent years, is expected to increase 14.9% to $22.1 billion, largely driven by investment in refineries (up 36.6%), wood products (up 60.8%) and chemical manufacturing (up 23.7%).

Government investment continues to trend up, specifically investment in infrastructure. Both local (+18.9%) and provincial (+10.8%) governments are anticipating significant increases.

StatsCan noted the outlook for investment in utilities has brightened thanks to a 13.5% increase in the electric power industry. On the whole, utilities are expected to increase investment 13.1% to $15.4 billion.

The government agency said investment intentions increased in every province and territory, led by the Northwest Territories (+36.4%) and Saskatchewan (+12.6%).

Investment in Quebec is anticipated to edge up 2.2% to $50.2 billion. Alberta should reach $52.3 billion (+7.8%) and Ontario is expected to hit $90.7 billion (+5.9%).

StatsCan said preliminary actual figures for 2004 indicate that investment is stronger now than original intentions reported last year. Total investment should reach $243.9 billion, an increase of 8.5% and much stronger than the 3.1% gain originally reported for 2004 intentions last year.