Building construction costs up again in Q4, but increases moderate
Building construction costs reported further – although not as severe as earlier in the year – increases in the fourth quarter of 2022, Statistics Canada reported on February 8.
Its latest look at building construction prices shows an increase of 1% in residential costs in the fourth quarter and of 1.6% in non-residential costs. These are compared with increases of 2.5% and 2.1% respectively in the third quarter of the year.
Shortages of skilled workers, and rising material costs – particularly fuel, concrete and steel – were among the key concerns reported by contractors across the industry. The availability of materials was also reported as a key issue among non-residential builders.
Fourth-quarter residential-building construction costs were driven by increases in equipment (+2.6%), metal fabrications (+2.4%), and concrete (+2.2%). Costs in the wood, plastics and composites division (+0.5%) grew at a slower rate compared with previous highs – likely due to a continued decline in lumber prices.
Across Statistics Canada’s 11-census metropolitan area (CMA) composite, the cost to build high-rise apartments (+1.7%) grew the most of all residential buildings in scope for the survey, followed by low-rise apartments (+1.0%).
Meanwhile, non-residential building construction cost growth was led by increases in structural steel framing (+2.5%), followed by concrete and metal fabrications (both up by 2.3%).
Construction costs for residential buildings in the 11-CMA composite rose 15.4% year over year in the fourth quarter, whereas non-residential building construction costs rose 11.1% year over year during the same period. Both year-over-year residential and year-over-year non-residential construction cost growth in the current quarter moderated from previous highs.
Toronto led year-over-year growth in construction costs for both residential (+21.9%) and non-residential (+14.5%) buildings, followed by Edmonton for residential buildings (+16.0%) and Moncton for non-residential buildings (+13.3%).