Building construction price indexes, fourth quarter 2019
Prices for residential building construction increased 0.5% in the fourth quarter, while the cost of non-residential building construction rose 0.4%.
Construction costs rise for all building types
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% to 0.5%. The largest quarterly price increase among residential buildings was for apartment buildings (+0.5%), while construction costs for non-residential buildings increased the most for factories (+0.5%).
Residential building construction costs increased the most in Halifax (+0.8%), followed by Montréal and Vancouver (both up 0.7%). Builders in the census metropolitan areas (CMAs) of Ottawa–Gatineau (Ontario part), Montréal and Halifax reported that higher residential building construction costs were largely related to shortages in skilled trades and to contractors charging higher prices because of increased demand for housing.
Construction costs for non-residential buildings increased the most in Montréal (+0.9%). Higher material prices and labour shortages were reported by non-residential builders in Toronto, Montréal and Vancouver.
Construction cost increases slow down year over year in every census metropolitan area
Costs for residential (+2.3%) and non-residential (+2.2%) building construction were both up over the 12-month period ending in the fourth quarter.
On an annual basis, construction costs for residential buildings rose the most in Vancouver and Montréal (both up 3.8%), followed by Ottawa (+3.5%).
For non-residential buildings, the largest year-over-year price increases were in Montréal (+3.6%), followed by Ottawa and Toronto (both up 2.9%). After peaking in the first quarter of 2019, the year-over-year growth in prices has slowed in all of the CMAs surveyed.
The year 2019 in review
Nationally, non-residential building construction costs rose 3.5% in 2019, while residential construction costs were up 2.9%.
Non-residential building construction costs increased the most in Ottawa (+4.9%), Montréal (+4.5%) and Vancouver (+4.1%). Builders in Ottawa and Montréal reported skilled trades shortages as a cause of increasing costs.
Residential construction costs increased the most in Ottawa (+5.1%), Vancouver (+4.8%) and Montréal (+4.1%) in 2019. Higher demand for residential buildings in Ottawa and Montréal resulted in upward pressures on construction costs, while lower demand in the Prairie region moderated construction costs.
Note to readers
The building construction price indexes are quarterly series that measure change over time in the prices that contractors charge to construct a range of new commercial, institutional, industrial and residential buildings in 11 census metropolitan areas: St. John's, Halifax, Moncton, Montréal, Ottawa–Gatineau (Ontario part), Toronto, Winnipeg, Saskatoon, Calgary, Edmonton and Vancouver.
These buildings include six non-residential structures: an office building, a warehouse, a shopping centre, a factory, a school, and a bus depot with maintenance and repair facilities. In addition, indexes are produced for five residential structures: a bungalow, a two-storey house, a townhouse, a high-rise apartment building (five storeys or more) and a low-rise apartment building (fewer than five storeys).
The contractor's price reflects the value of all materials, labour, equipment, overhead and profit to construct a new building. It excludes value added taxes and real estate fees and any costs for land, land assembly, building design and land development.
With each release, data for the previous quarter may have been revised. The index is not seasonally adjusted.
Statistics Canada has launched the Producer Price Indexes Portal as a part of a suite of portals for prices and price indexes. This web page provides Canadians with a single point of access to a wide variety of statistics and measures related to producer prices.
The video "Producer Price Indexes" is available on the Statistics Canada Training Institute web page. It provides an introduction to Statistics Canada's producer price indexes—what they are, how they are made and what they are used for.
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).