Prices for Canadian residential building construction up 2.4 percent in Q3

Thursday, 05 November 2020 20:52:21 (GMT+3)   |   San Diego
       

According to Statistics Canada, prices for residential building construction rose 2.4 percent in the third quarter, the largest gain since the index was introduced in the first quarter of 2017, while the cost of non-residential building construction increased 0.4 percent.

Increased demand was felt more strongly in the residential construction sector. According to the Building Permits Survey, the total value of residential building permits rose 6.9 percent in September. Residential building construction investment increased 8.2 percent in August and exceeded pre-COVID-19 levels (February 2020).

General contractors in the non-residential sector across Canada continued to face higher lumber prices and insurance rates and lower productivity due to COVID-19 physical distancing and hygiene requirements. As market uncertainty continues, general contractors reporting data for the Construction Contractors Survey indicated that they are bidding on fewer projects, reducing margins and constraining price increases.

As the seasonality of the construction industry slows demand in the fourth quarter, suppliers may have the opportunity to catch up on production and complete outstanding orders, Statistics Canada said, adding that this may help some contractors catch up on existing projects currently constrained under the new work conditions, as well as by ongoing labor and material shortages.

Nationally, construction costs rose for every residential building type included in the survey in the third quarter, with increases ranging from 0.9 percent to 2.9 percent. The largest quarterly price increase was for townhouses (+2.9 percent), followed by single-detached houses (+2.8 percent).


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