Data released by Statistics Canada this week shows that Canada’s real gross domestic product (GDP) grew by 0.7% in March, following a 0.9% expansion in February.

Construction was among several industries to report gains.

Overall gains were led by client-facing industries, such as accommodations and food services (10.9%) and arts, entertainment and recreation (13.5%).

Both services-producing (+0.6%) and goods-producing (+0.9%) industries were up, while 14 of 20 industrial sectors expanded in March.

Construction reaches all-time high

GDP output in the construction sector rose 1.2% in March to reach $155.4 billion. The gain means output has surpassed April 2021’s total of $155.1 billion to reach an all-time high. All subsectors contributing to the growth.

Residential building construction (+1.8%) led the growth for the third month in a row, with home alterations and improvements and construction of single-detached homes contributing the most to the increase during the month.

Non-residential building construction rose 0.9% in March, up for the ninth consecutive month. All construction activities posted gains with commercial building construction contributing the most to the increase.

Engineering and other construction activities, meanwhile, increased 0.6% in March, continuing an upward trend that began at the end of 2020 and is 1.9% below February 2020's pre-pandemic level of activity. Repair construction rose 1.2% in March 2022, up for the seventh time in eight months, as both the residential and non-residential segments expanded.

GDP adds 0.8% in Q1

Meanwhile, real GDP grew by 0.8% in the first quarter of 2022, a third consecutive quarterly increase.

Growth slowed in the first quarter compared with the previous two quarters due to a drop in international exports volumes.

Investment in residential construction rose for a second consecutive quarter, up 4.3%, as renovations (+9.3%), resale costs (+4.6%) and new construction (+0.2%) all increased in the first quarter of 2022.

Aside from Alberta and the territories, new construction increased in every province, led by the Atlantic provinces. Home resale activity was particularly robust in Alberta (+27.4%) and Prince Edward Island (+15.0%).

While new construction and notable renovation activity pushed the value of residential structures to $3.5 trillion, Canadians added $33.9 billion in household residential mortgage debt in the first quarter of 2022, down from the $44.8 billion recorded in the fourth quarter of 2021. The Bank of Canada raised the policy interest rate in the first quarter to 0.5% from 0.25%, where it had remained since the first quarter of 2020.

Business investment in non-residential structures (+2.9%) and in machinery and equipment (+0.9%) also increased in the first quarter of 2022. Investment in engineering structures rose 3.5%, as spending on the Kitimat LNG project in British Columbia and oil and gas activity increased.