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Skilled trades shortage increases construction costs

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Higher residential building construction costs were largely related to a shortage of skilled trades and to contractors charging higher prices, reports Statistics Canada. This was evident in census metropolitan areas (CMAs) like Ottawa, Montreal, and Halifax.

Construction costs for non-residential buildings increased the most in Montreal at 0.9 per cent. Higher material prices and labour shortages were reported by non-residential builders in Toronto, Montreal and Vancouver.

The price of residential construction increased by 0.5 per cent in the fourth quarter, while the cost of non-residential building construction rose 0.4 per cent.

At the national level, construction costs for different types of residential and non-residential buildings increased during the fourth quarter with growth ranging from 0.3 per cent to 0.5 per cent. Apartment buildings experienced the largest quarterly price increase for residential buildings with an increase of 0.5 per cent. Construction costs for non-residential buildings increased the most for factories at 0.5 per cent.

Halifax saw the largest increase for residential building construction, followed by Montreal and Vancouver.

On an annual basis, construction costs for residential buildings rose the most in Vancouver and Montreal – both up 3.8 per cent – followed by Ottawa at 3.5 per cent.

For non-residential buildings, the largest year-over year price increases were in Montreal at 3.6 per cent, followed by Ottawa and Toronto, both at 2.9 per cent.

Non-residential building construction costs increased the most in Ottawa at 4.9 per cent, Montreal at 4.5 per cent, and Vancouver at 4.1 per cent. Builder in Ottawa and Montreal also reported skilled trades shortages as a cause of increasing costs.

Residential construction costs increased the most in Ottawa at 5.1 per cent, Vancouver at 4.8 per cent, and Montreal at 4.1 per cent in 2019. Higher demand for residential buildings in Ottawa and Montreal resulted in upward pressures on construction costs, while lower demand in the Prairie region moderated construction costs.

 

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