Capital investment in Canada is expected to remain robust this year, exceeding even the pace of growth of 2007, according to a new report from Statistics Canada.

Total investment in non-residential construction and machinery and equipment is expected to reach $250.1 billion, up 6.8% from 2007, according to a sample survey of 28,000 businesses and governments. This increase will be higher than the 4.7% gain in 2007.

Of the total, $129.2 billion is earmarked for non-residential construction, a 7.9% increase, while $120.9 billion is planned for investment in machinery and equipment, a 5.7% gain.

World-wide demand for Canada’s natural resources and raw materials is keeping prices high and fuelling capital spending in the primary sector and the related downstream industries, StatsCan says.

The biggest gains in investment are projected to occur in the oil and gas extraction sector, transportation sector, such as pipelines, and electricity generation.

Investment intentions in the mining and oil and gas extraction sector are forecast to hit $56.4 billion in 2008, a 4.3% gain from last year. This will be a turnaround from a 6.4% decline in 2007.

The transportation and warehousing sector is expected to reap benefits from the gains in the oil and gas industry, especially in the area of pipelines.

Companies estimated their total investment this year at just over $23.1 billion, up 23.3% from 2007. This would come on the heels of a 29.1% jump in 2007.

Investment in pipelines is anticipated to hit $6 billion, three times the level of $2.0 billion in 2006.

In the utilities sector, growth in total investment is anticipated to surpass the national growth of 6.8% this year. However, this will be a marked deceleration from 2007.

Utilities anticipate capital spending amounting to nearly $21.3 billion this year, up 8.0%. In contrast, investment the year before rose 23.8% when large projects were initiated.

The public sector accounts for slightly above one-quarter ($68.6 billion) of the $250.1 billion in total investment intentions. Investment in the public sector is expected to increase 11.8% from 2007, more than twice the rate of growth of 5.1% in the private sector.

At the same time, Canada’s housing market is expected to remain virtually stable. Investment this year is forecast at just over $89.3 billion, up only 1% from 2007. This compares with an 8.3% increase in 2007.

Total capital investment including housing, non-residential construction and machinery and equipment is expected to rise by $16.9 billion to an estimated $339.5 billion in 2008. This represents a gain of 5.2% compared with 2007.