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Industrial Product Price Index, Selected Construction Materials Series

(See table 2 )

In the fourth quarter of 2006, the three largest quarterly price changes amongst the more important commodities used in construction were decreases for particle-board and wafer-board (-12.7%) and concrete reinforced bars (-4.0%) and an increase for softwood plywood from other than Douglas Fir (+4.9%).

The four largest year-over-year changes were decreases for particle-board and wafer-board (-41.4%) and increases for insulated wire and cable, not exceeding 1000 volts (+24.5%), metal roofing and siding (+8.5%) and lath and plaster gypsum wall board (+5.2%). In the market for particle-board and wafer-board, prices continued to decline in October, edged up marginally in November, but then declined somewhat in December.

The quarterly price of concrete reinforcing bars dropped by 4.0% with declines in October and November and no change in December.

The year-over-year change in the price level of particle-board and wafer-board continued its decline in the fourth quarter, dropping to -41.4% from -26.3% in the third quarter. The prices of particle-board and wafer-board have tended to decline since reaching a peak in October 2005. In December 2006, they were about half their peak level.

The year-over-year change in the price of insulated wire and cable, not exceeding 1000 volts dropped to +24.5% in the fourth quarter from +32.8% in the third quarter. Its price edged up only marginally in October and November and was unchanged in December. Although world demand for copper has been strong for some time, Canadian prices for copper and copper alloy in their primary forms, according to the Industrial Product Price Index, hit a peak in July, but has declined in August, September, November and December and only showed some recovery in October.

The year-over-year change in the price of metal roofing and siding continued to increase in the fourth quarter, reaching +8.5%. However, the price level has been unchanged since July and the only two months to show a notable increase in 2006 were March and June.

The year-over-year price of lath and plaster gypsum wall board continued to decline, dropping to +5.2% in the fourth quarter from its most recent high of +7.4% in the second quarter of 2006. Prices during the quarter edged down in October but remained unchanged in November and December.

Construction Union Wage Rates Index

(See table 3 )

In the fourth quarter of 2006 the Canada Total Construction Union Wage Rates Index (including supplements) increased 0.1% to 137.9 (1992=100) compared with the previous quarter, and was 1.9% higher compared with the third quarter of 2005.

On a regional basis, only the index for the Prairie Region registered a quarterly change (+0.6%). The Atlantic Region, the Quebec Region, the Ontario Region as well as the British Columbia Region all remained unchanged from the previous quarter.

New Housing Price Index

(See table 5 )

The New Housing Price Index (1997=100) rose 1.4% in the fourth quarter of 2006, down from the previous quarter increase of 3.6%. This was the smallest quarterly increase since the third quarter of 2005. Prices rose across the country with the Prairie Region continuing to lead with 3.9%, followed by British Columbia (+1.6%), Quebec (+0.9%), Ontario (+0.4%) and the Atlantic Region (+0.2%).

In the Prairie Region, Edmonton (+7.8%) led the way followed by Saskatoon (+4.1%), Regina (+2.1%), Calgary (+1.9 %) and Winnipeg (+1.7%). The healthy economy in all of the Prairie Provinces created upward pressure on prices. Building materials, in particular drywall and electrical and roofing supplies, helped to push up prices. Increased land costs due to servicing costs and developer increases were also a factor with the exception of Regina. Strong demand for housing added to the upward pressure.

In British Columbia, Vancouver (+1.8%) registered an increase while Victoria (-0.4%) dropped slightly. Home builders in Vancouver cited a healthy housing market as the main factor for the price increases. Some builders in Victoria reduced prices in order to stimulate sales.

In Quebec, both Montréal (+1.1%) and Québec City (+0.1%) registered increases. Strong demand, higher prices for building materials, labour and land were the main factors in Montreal while material costs alone were cited in Quebec City.

Prices rose in all but one of the metropolitan areas surveyed in Ontario. Favourable market conditions along with higher prices for labour and building materials were among the reasons for the increases. Hamilton and Toronto and Oshawa cited land increases. London (+1.0%), Greater Sudbury and Thunder Bay (+0.9%), St. Catharines-Niagara (+0.8%) and Hamilton (+0.7%) registered the highest increases followed by Ottawa-Gatineau (+0.6%), Toronto and Oshawa and Kitchener (0.4% each). Windsor showed a decrease of -1.3% due mostly to a soft market.

Moderately higher material and labour rates combined to produce a quarterly gain in the Atlantic Region. Higher land values were cited in Halifax and Saint John, Fredericton and Moncton. Halifax (+0.4%) had the largest increase followed by Charlottetown (+0.3%), St. John’s and Saint John, Fredericton and Moncton (+0.2% each).

Apartment Building Construction Price Index

(See table 6 )

The composite price index for apartment building construction (1997=100) stood at 147.3 in the fourth quarter of 2006, up 2.4% from the previous quarter and up 9.7% from the fourth quarter of 2005. The quarterly increase was mostly the result of higher labour costs and a strong market for building construction, particularly in Western Canada. Also, the year-to-year advance was the largest since the index was first published in the first quarter of 1988.

Western Canada recorded the highest quarterly changes, led by Calgary (+6.8%), Edmonton (+6.2%) and Vancouver (+4.6%). Lower price increases were measured in Eastern Canada, with a 0.8% advance in Toronto followed by Ottawa–Gatineau (Ontario part) (+0.6%), Halifax (+0.4%) and Montréal (+0.1%).

Calgary experienced the highest gain from the fourth quarter of 2005 (+21.9%), followed by  Edmonton (+18.9%), Vancouver (+15.7%),  Toronto (+6.5%), Ottawa–Gatineau (Ontario part) (+5.7%), Halifax (+5.3%) and Montréal (+3.5%).

Non-residential Building Construction Price Index

(See table 7 )

The composite price index for non-residential building construction increased 2.4% from the previous quarter to 149.4 (1997=100) in the fourth quarter, up 9.3% from the fourth quarter of 2005. The 2.4% increase was mostly the result of higher labour costs and the persistent strength of the non-residential building construction market, particularly in Western Canada.

Western Canada recorded the highest increases from the third quarter with Calgary posting a 5.9% increase, followed by Edmonton (+5.5%) and Vancouver (+4.0%). Smaller upward movements were recorded in Eastern Canada with Ottawa–Gatineau, Ontario part, increasing 1.3%, followed by Toronto (+1.1%), Halifax (+0.8%) and Montréal (+0.4%).

Calgary also had the largest change (+18.8%) from the fourth quarter of 2005, followed by Edmonton (+16.6%), Vancouver (+12.9%), Toronto (+6.8%), Ottawa–Gatineau, Ontario part (+6.4%), Halifax (+4.9%) and Montreal (+3.2%).

Machinery and Equipment Price Index

(See table 8 )

The Machinery and equipment price index (MEPI) stood at 91.4 (1997=100) in the fourth quarter, up 1.8% from the previous quarter. The import component index rose 2.8%, while the domestic series registered a slight increase of 0.2%. The total MEPI was down 0.9% compared to the fourth quarter 2005. The import index fell by 1.4% compared to the same quarter a year ago, while the domestic index had a slight increase of 0.2%.

In the fourth quarter, all industries experienced increases in prices of machinery and equipment purchased. Finance, insurance and real estate (+2.8%), with its finance and insurance sub-component having increased +2.5%, contributed significantly to the total MEPI quarterly increase. The second major contributor to the total quarterly increase was manufacturing industries (+1.8%) and of these, in particular food and beverages (+3.3%) and transport equipment (+1.6%) industries.

Among commodities, price increases for automobiles, excluding passenger vans (+5.2%), trucks, road tractors and chassis (+4.8%) achieved the largest gains while computers and peripherals equipment such as terminals, printers and storage devices (+1.1%) moderated the increase of commodities.

The US dollar appreciated 1.6% against its Canadian counterpart in the fourth quarter of 2006. The strengthening of the US dollar has an upward affect on the imported goods’ price movements.

Electric Utility Construction Price Index

(See table 9 )

Annual 2005 (revised) and the first half 2006 (preliminary)

Construction costs for distribution systems increased by 4.0% during the first half of 2006. The increase in the material component for this period (+8.2%) was the major contributor to this change. The revised 2005 data for distribution systems were 1.9% higher from 2004.

Construction costs for the transmission line system series rose 2.0% during the first six months of 2006 compared with the 1.5% increase for all of 2005. The transmission line component climbed 2.3% during the same period in 2006, while in 2005 there was a 1.1% annual gain. The rise in materials (+4.4%) significantly influenced this increase. The substation component rose by 1.8% in 2006 following the same increase for the previous year. Station equipment (+2.1%) posted the largest gain.

Consulting Engineering Services Price Index (CEPI)

(See table 10 )

The Consulting Engineering Services Price Index (CESPI) is now available for 2005. The CESPI measures the change in the total price of engineering and consulting services, as well as changes in the wage rate and realized net multiplier components. Detailed indexes are available for fields of specialization and for regional, domestic and foreign markets.

The Canada total CESPI for 2005 was 122.9 (1997=100), up 4.1% from the revised index of 118.1 for 2004.

Infrastructure Construction Price Index

An analytical price index series measuring annual changes in the cost of municipal infrastructure construction funded by development charges has been developed by Statistics Canada on behalf of the City of Ottawa. The annual index for 2006 was 119.5 (2001 =100), an increase of 5.9% over the revised annual index of 112.8 for 2005. The annual indexes for 2004, 2003 and 2002 were 107.7, 105.1 and 102.2 respectively as previously published.