Earlier this month, Statistics Canada updated statistics for capital expenditures in the national oil and gas sector. The statistics now run from the first quarter of 2013 to the first quarter of 2022.
Capital expenditures are what companies spent on such things as machinery, equipment, and buildings, as well as major repairs to these goods things.
Statistics Canada specifically surveyed companies involved in oil and gas extraction in Canada. The response rate from these companies in the first quarter of 2022 was 79%.
According to the data, companies spent $7.691 billion on capital expenditures within oil and gas extraction between January and March of this year.
The previous quarter, capital expenditures in this area were only $7.191 billion. That means that quarter-over-quarter spending had increased by $500 million in the first quarter, or about 6.95%.
Not only that, but first quarter spending the year before was even lower, at $5.114 billion. That’s a 50.39% increase, or $2.577 billion.
That might seem like a great sign, for people who see capital investment in digging up oil and gas as a good thing and as a positive economic indicator. And if you’re one of those people, there’s something else you should know.
So, while it’s true that oil and gas extraction capital expenditures are up compared to the previous quarter and even a year ago, they’re still below pre-pandemic levels, which means this growth is still recovery growth.
Not only that, but capital expenditures are still significantly lower than they were 9 years ago.
And that means it’s unlikely that these expenditures will result in the same number of jobs that we saw in the middle of the previous decade.
So be careful how you interpret economic data like this.