Canadian Building Construction Price Indexes (BCPI) for Q3, released by Statistics Canada, revealed a notable shift in the pace of rising costs within the construction industry. For the first time since Q2 2020, the growth in residential building construction costs has slowed to 0.9%, a slight decrease from the previous quarter’s 1.0% rise. Similarly, non-residential building construction costs experienced their slowest growth since Q4 2020, increasing by only 0.5%, compared to the previous quarter’s 1.4% climb. This deceleration is a significant indicator of changing dynamics in the construction sector.
The year-over-year data paint a somewhat different picture, with residential building construction costs in the 15-Census Metropolitan Areas (CMA) composite rising by 4.0%. Non-residential construction costs followed closely, with a 3.9% increase. These figures, though indicating ongoing growth, reflect a moderated escalation compared to previous periods. Builders in the industry cited several persistent factors contributing to these cost pressures, including skilled labor shortages, rising land prices, limited land availability, and changes in building codes. These elements continue to shape the landscape of construction costs across Canada.
Moreover, the Q3 BCPI report marked the first inclusion of data from Québec, London, Regina, and Victoria CMAs, providing a broader scope of analysis. Among these new additions, Victoria experienced the highest increase in residential construction prices, at 0.8%. Conversely, London saw a comparable 0.8% rise in non-residential construction prices. While these increases are notable, they further underscore the trend of slower overall growth within the sector.
In conclusion, while construction costs in Canadian cities showed signs of stabilizing this quarter, various underlying factors continued to exert upward pressure. The deceleration in the rate of increases provides a complex narrative for industry stakeholders. As new regions get incorporated into the BCPI, a more comprehensive understanding of the national construction cost trends will emerge, guiding future policy and economic decisions.