Construction Costs Maintain Growth But At Lower Rate

Residential building construction prices grew 3.7 per cent in the third quarter, following a 7.6 per cent increase in the second quarter, says Statistics Canada. Non-residential building construction price growth slowed down, up only 2.8 per cent after rising 3.9 per cent last quarter, the highest level in 13 years. This can be attributed to increases in the costs of building construction which slowed down in the third quarter, following a second quarter peak. Wood, plastics, and composites continued to be the largest contributor to the price change for residential building construction, along with the labour shortages. Also, from the increases in the price of plastic resin attributed to manufacturing capacity disruptions from severe weather events earlier in 2021. This also contributed to the increase of residential building construction costs. Furthermore, the rise in the price of concrete contributed the most to higher costs of building high-rise apartments. This is due to increasing fuel and steel reinforcement prices and truck driver shortages. The largest quarterly growth in residential building construction costs happened in Calgary, AB (up 5.4 per cent), Edmonton, AB (up 4.9 per cent), and Toronto, ON (up 4.5 per cent), whereas increases in the non-residential building sector were led by higher construction costs in Toronto (up 4.2 per cent), Ottawa, ON (up 4.1 per cent), and Moncton, NB (up 3.3 per cent).