Labour shortages, material costs continue impacting construction costs

Residential building construction costs increased 1.9% in the second quarter, following 1.8% growth in the previous quarter, says Statistics Canada. Meanwhile, non-residential building construction costs rose 1.5% in the second quarter, following a 1.7% increase in the previous quarter. Year over year, construction costs for residential buildings in the 11-census metropolitan area (CMA) composite rose 7.5% in the second quarter, whereas non-residential building construction costs rose 7%. Toronto, ON (+13%) led year-over-year growth in construction costs for residential buildings, while Moncton (+12.5%) led growth for non-residential building. 

Skilled labour shortages, cost of materials and labour rate changes were reported by contractors as key factors impacting the construction sector. 

The diverging price movements of key construction materials impacted residential construction costs. In the second quarter, prices continued to rise for cement and ferrous metals, while they declined for lumber, plastics, and non-ferrous metals. 

Non-residential building construction costs grew the most for structural steel framing (+2.6%) in the second quarter, followed by concrete (+2.5%) and metal fabrications (+2.4%) divisions.