Ontario Construction News staff writer
Building construction costs jumped in the third quarter, but at a slower rate than the rest of the year, according to Statistics Canada.
Growth in residential building construction costs slowed during the third quarter, with 10 of the 11 census metropolitan areas (CMAs) recording smaller increases than the previous two quarters. This slowdown was largely attributed to declining softwood lumber prices that have materialized amid a downswing in US housing construction.
According to the latest report, residential costs rose by 2.5 per cent over the past three months, and non-residential was up 2.1% per cent.
That’s compared to residential increases of 5.3 per cent and non-residential 4 per cent in the previous six months.
Contractors surveyed said growth in building construction costs was partly due to increased labour costs and shortages. The industry’s job vacancy rate remained high and contract renegotiations contributed to higher labour costs in the third quarter, Stats Can concluded.
Also, higher material costs, material and equipment shortages contributed to higher costs. Contractors also noted that fuel prices are a factor.
Costs increased the most in Toronto (+4.2%), followed by Vancouver (+1.9%) and St. John’s (+1.7%).
High-rise apartment building construction costs recorded the greatest increase (+3.0%), led by Toronto (+3.9%), Vancouver and Calgary (up by 2.0%).
Also, non-residential building construction costs slowed, with cost increases driven by price jumps for cement and concrete and other materials and labour shortages.
Toronto led the increases in this category (+2.6%), followed by St. John’s (+2.3%) and the largest increases were in factories (+2.3%) and office buildings (+2.1%).
Building construction costs for residential construction in the 11-city composite climbed 18.7% year over year, with Toronto (+25.9%) and Edmonton (+19.5%) showing the largest growth.
Non-residential construction building costs rose 12.5% year over year with cost increases in Toronto (+15.6%), Montréal (+13.0%) and Ottawa (+12.6%) leading.