HALIFAX - An economic think tank says overall spending on major projects on the East Coast is expected to fall overall in 2016 by about two per cent compared to the year before.

The Atlantic Provinces Economic Council says investment will be down to $12.8 billion, due in part to a decrease in Newfoundland and Labrador's offshore oil projects and despite higher-than-expected spending on the Muskrat Falls hydroelectricity project in Labrador.

The council says Newfoundland and Labrador is being hit by the winding down of the construction phase of the Hebron offshore oil project and less activity on other offshore oil projects.

However, Patrick Brannon, director of major projects at the council, said spending on the Muskrat Falls hydroelectricity project in Labrador has offset the decrease in the oil and gas industry.

He says between $1.5 and $1.6 billion was spent in 2015 and "we expect a similar level this year, higher than anticipated."

"It's positive from an investment perspective ... but of course it's negative from a public purse side of things."

The province has spent almost $4.8 billion building the Muskrat Falls dam and power house on the lower Churchill River, the largest publicly funded project in its history.

Construction costs have soared over budget and first power that was expected in 2017 has been delayed several months.

The decline in Newfoundland project spending is also being offset by increases in spending in Nova Scotia, New Brunswick and Prince Edward Island, where there are a number of major construction projects.

Spending in Nova Scotia will be $3.9 billion, 19 per cent higher than in 2015, mainly due to work on construction of the arctic offshore patrol ships at the Halifax Shipyard and increased offshore oil and gas exploration.

Prince Edward Island is expecting $358 million in work on the installation of two underwater electricity transmission cables across the Northumberland Strait.

Spending will grow by five per cent in New Brunswick, led by electricity projects, public sector infrastructure and the Saint John Safe Clean Drinking Water project.

News from © The Canadian Press, 2016