June 10, 2022 – Statscan reports that prices for electrical products continued to climb in the first quarter of 2022, with electrical safety and security systems seeing historically strong quarterly price growth. These higher prices had a particular impact on the construction costs of schools and factories.
Prices for electrical, electronic, audio-visual and telecommunications products also peaked year-over-year (+20.9%) in February 2022, continuing the upward trend seen the previous year. .
Residential building construction costs rose 5.6% nationwide in the first quarter of 2022, the largest increase since the second quarter of 2021. Non-residential building construction costs increased by 2. 6% in the first quarter of 2022.
Contractors surveyed attributed some of the growth in building construction costs to rising labor costs, and an increase in vacancies in construction trades contributed to higher wages in these professions.
Additionally, amid rising fuel prices, contractors reported that more of their spending was now allocated to transporting their construction materials.
Increases in construction of non-residential buildings costs continued to slow or stabilize in most census metropolitan areas (CMAs)* covered by the survey. Higher non-residential construction costs remained largely driven by continued growth in prices for structural metal products, which were impacted by supply chain constraints.
Non-residential building construction costs increased the most in Toronto (+3.6%) and Montreal (+3.0%), with the cost of building warehouses and factories rising the most in these CMAs. Higher construction costs in Toronto may have been influenced by demand conditions, with increased investment in warehouses and factories. Specifically, investment in warehouses in Toronto hit a record high in January, while investment in factories rebounded between November 2021 and February 2022 after declining in the previous year and a half.
St. John’s (+1.0%) had the smallest quarterly price increase, followed closely by Moncton (+1.2%). St. John’s posted its smallest increase since the fourth quarter of 2020.
On the residential side, Growth in building construction costs accelerated in the first quarter of 2022, after moderating in the previous two quarters. The majority of the 11 CMAs covered by Statscan’s survey recorded larger quarterly increases than in the previous two quarters. The increase in residential construction costs was largely attributable to the rebound in softwood lumber prices.
Construction costs residential buildings grew the most in Calgary (+6.9%), followed by Edmonton and Toronto (both up 6.8%). While construction costs for a single-detached home in Toronto increased the most in the first quarter, it was the construction cost for townhouses that increased the most of all the buildings surveyed in Calgary and Edmonton.
Interestingly, according to Statscan, rising home construction costs in Calgary and Edmonton coincided with the largest recorded monthly increases in new home prices in more than 15 years, with Calgary recording its recent peak in March ( +5.2%) and Edmonton reached its recent peak in February (+3.7%).
Moncton (+2.1%) and St. John’s (+3.0%) recorded the smallest quarterly price increases in residential building construction in the first quarter of 2022. St. John’s and Montreal both saw a deceleration in price growth compared to the previous quarter.
* The 11 Census Metropolitan Areas (CMAs) are: St. John’s, Halifax, Moncton, Montreal, Ottawa, Toronto, Winnipeg, Saskatoon, Calgary, Edmonton, Vancouver.