Canadian residential building construction costs increased 1.0 percent in the fourth quarter, following a 2.5 percent increase in the previous quarter. Non-residential building construction costs rose 1.6 percent in the fourth quarter, following a 2.1 percent increase in the previous quarter.
Skilled labor shortages and cost of materials, particularly fuel, concrete and steel, were reported by contractors as key issues across the construction industry. For non-residential construction, availability of materials was also reported as a key issue.
Residential building construction costs in the fourth quarter were driven by cost increases in equipment (+2.6 percent), metal fabrications (+2.4 percent), and concrete (+2.2 percent). Costs in the wood, plastics and composites division (+0.5 percent) grew at a slower rate compared with previous highs, which can be attributed to the continued decline in lumber prices.
In the 11-census metropolitan area (CMA) composite, the cost to build high-rise apartments (+1.7 percent) grew the most of all residential buildings in scope for the survey, followed by low-rise apartments (+1.0 percent).
Costs to construct residential buildings increased the most in Vancouver (+1.6 percent), followed by St. John's (+1.4 percent) and Winnipeg (+1.3 percent). Most CMAs covered by the survey recorded their lowest quarterly increases of the year in the fourth quarter.
Non-residential building construction cost growth was led by cost increases in structural steel framing (+2.5 percent), followed by concrete and metal fabrications (both up by 2.3 percent). Of all non-residential buildings surveyed, the cost to build bus depots with maintenance and repair facilities and factories (both up by 1.9 percent) rose the most in the 11-CMA composite.
While growth in non-residential building construction costs across most CMAs slowed in the fourth quarter, Moncton (+3.6 percent) was the only CMA to record its largest quarterly price increase of the year. Toronto (+2.4 percent) and Ottawa (+1.4 percent) recorded the next largest quarterly increases in non-residential construction costs.
Construction costs for residential buildings in the 11-CMA composite rose 15.4 percent year over year in the fourth quarter, whereas non-residential building construction costs rose 11.1 percent 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.