Nov. 2, 2022
Construction Cost Increases Slowing
In the third quarter, residential building construction costs increased 2.5 per cent and non-residential building construction costs rose 2.1 per cent, says Statistics Canada. The growth was slower than the second quarter, where residential construction costs grew 5.3 per cent and non-residential costs were up four per cent. The rate of growth for both residential and non-residential building construction costs has notably slowed when compared to the past year and a half. Contractors surveyed attributed part of the growth in building construction costs to skilled labour shortages and high labour costs. Despite a decline in number of vacancies for construction jobs from April to July, the vacancy rate remains high, which has kept upward pressure on wages in the industry. Labour contract renegotiations also contributed to higher labour costs in the third quarter. Additionally, higher material costs, amid a limited availability of materials and equipment ‒ particularly concrete, steel, glass, and piping ‒ contributed to higher costs. Contractors also noted that fuel prices continue to add upward pressure on construction costs.