Nov 1, 2023
Q3 building construction costs show slow increase
Residential building construction costs increased 1.0 percent in the third quarter, following a 2.0 percent increase in the previous quarter, says Statistics Canada. Meanwhile, non-residential building construction costs rose 0.9 percent in the third quarter, following a 1.6 percent increase in the previous quarter.
This marked the slowest quarterly growth in residential building construction costs since the second quarter of 2020 and in non-residential building construction costs since the fourth quarter of the same year.
Year over year, construction costs for residential buildings in the 11-census metropolitan area (CMA) composite rose 6.0 percent in the third quarter of 2023, while non-residential building construction costs saw a similar increase of 5.9 percent. Toronto, ON, (+10.0 percent) led year-over-year growth in construction costs for residential buildings, while Moncton, NB, (+12.3 percent) led growth for non-residential buildings.
Skilled labour shortages and the resulting increases in wage rates, availability of materials, and interest rate pressure were all reported as key factors impacting the construction sector.
Rising equipment costs were cited as the leading reason for the increase in non-residential construction costs. Costs to construct non-residential buildings increased the most in Moncton and Saskatoon, SK, (each up 1.7 percent), followed by Vancouver, BC, (+1.2 percent) in the third quarter.
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