Analysis - First Quarter 2011

View the most recent version.

Industrial Product Price Index, Selected Construction MaterialsSeries

(See table 2)

In the first quarter of 2011, the four largest quarterly price changes among the main commodities used in construction were all increases, two of which were in the structural group, one in the electrical group and one in the "other" group. The largest increase was diesel fuel (+13.5%), followed by structural shapes, steel including fabricated (+10.7%), fluorescent lighting fixtures (+4.3%) and the fourth largest increase was concrete reinforcing bars, not fabricated (+4.1%).

The price for diesel fuel rose 13.5% in the first quarter 2011 after also rising 13.7% in the fourth quarter of 2010 and dropping 1.3% in the third quarter of 2010.

Prices for structural shapes, steel including fabricated, which had dropped by 3.7% in the third quarter 2010 and by 0.5% in the fourth of 2010, increased by 10.7% in the first quarter 2011.

Prices for fluorescent lighting fixtures rose 4.3% in the first quarter 2011, following lesser increases of 0.6%, 0.1% and 0.5% in the second, third and fourth quarters of 2010 respectively.

Prices for concrete reinforcing bars increased 4.1% in the first quarter 2011, following an increase of 1.1% in the fourth quarter of 2010 and a drop of 0.3% in the third quarter of 2010.

The four largest year-over-year changes among the main commodities used in construction were three increases, of which two were in the structural group and one in the "other" group. The decrease was in the architectural group. These changes were: diesel fuel (+25.7%), concrete reinforcing bars, not fabricated (+18.0%), structural shapes, steel including fabricated (+11.4%) and the decrease being for softwood plywood excluding Douglas Fir (-10.5%).

After significant year-over-year drops in the price of diesel fuel throughout the four quarters of 2009, prices have risen year-over-year by 17.1% in the first quarter of 2010, 16.1% in the second quarter, 7.2% in the third quarter, 12.9% in the fourth quarter and 25.7% in the first quarter 2011.

Prices of concrete reinforcing bars, not fabricated have been rising year-over-year for the past four quarters with increases of 9.8% in the second quarter 2010, 11.5% in the third quarter, 14.8% in the fourth quarter and 18.0% in the first quarter 2011.

Prices of structural shapes, steel including fabricated increased year-over-year by 11.4% in the first quarter 2011 following a similar increase of 8.9% in the fourth quarter of 2010.

Prices of softwood plywood excluding Douglas Fir have dropped year-over-year for a third consecutive quarter falling by 12.8% in the third quarter 2010, 8.4% in the fourth quarter 2010 and 10.5% in the first quarter 2011.

Construction Union Wage Rates Index

(See table 4)

In the first quarter of 2011 the Canada Total Construction Union Wage Rates Index (including supplements) remained the same compared with the previous quarter. It was 1.7% higher compared with the first quarter of 2010.

On a regional basis, the index for the Atlantic Region registered the highest quarterly change (+0.4%) followed by the Prairie Region (+0.1%). The Quebec, Ontario, British Columbia Regions remained unchanged from the previous quarter.

New Housing Price Index

(See table 5)

The New Housing Price Index (2007=100) rose 0.7% in the first quarter of 2011, following a 0.4% increase in the fourth quarter of 2010. The Atlantic Region (+0.8%), Quebec (+0.5%), Ontario (+0.8%) and the Prairie Region (+0.5%) all posted increases, while British Columbia remained unchanged from the last quarter.

Material and labour costs as well as improved market conditions contributed to the increases in the Atlantic Region. St. John's (+1.6%), Charlottetown (+0.9%) and Halifax (+0.5%) posted increases this quarter. Saint John, Fredericton and Moncton saw a decrease from last quarter (-0.2%).

In Quebec, increases were observed in both Québec (+0.5%) and Montréal (+0.4%). Higher material and labour costs were the primary reasons for the increases in both metropolitian areas.

Competitive market conditions as well as increased material and labour costs contributed to the increases in Ontario this quarter. The metropolitan areas of Toronto and Oshawa (+1.1%), Kitchener-Cambridge-Waterloo (+1.1%), Ottawa-Gatineau (+0.5%) Greater Sudbury and Thunder Bay (+0.3%), and London (+0.1%) recorded increases, while Windsor (-1.4%), St. Catharines-Niagara (-0.2%) and Hamilton (-0.1%), recorded decreases during the same time period.

Increased land development costs as well as higher material and labour costs were the primary reasons for the increases in the Prairie Region this quarter. Winnipeg (+2.0%), Regina (+1.3%), Saskatoon (+0.2%), Edmonton (+0.6%) and Calgary (+0.1%) all experienced increases this quarter.

In British Columbia, Victoria (-0.2%) posted a decrease as builders reduced their prices in order to stimulate sales. Vancouver remained unchanged from the last quarter.

Apartment Building Construction Price Index

(See table 6)

The composite price index for apartment building construction increased 1.2% in the first quarter compared with the previous quarter. This was the fourth consecutive quarterly increase in the composite index.

All seven of the census metropolitan areas (CMAs) surveyed reported quarterly increases, ranging from 0.6% to 1.8%. Ottawa–Gatineau, Ontario part (+1.8%) and Toronto (+1.7%) posted the largest increases, while Calgary (+0.6%) reported the smallest gain.

Year over year, the composite price index for apartment building construction was up 3.1% in the first quarter. Of the CMAs surveyed, Ottawa–Gatineau, Ontario part (+4.7%) reported the largest year-over-year increase, while Calgary (+1.2%) posted the smallest advance.

Non-residential Building Construction Price Index

(See table 7)

The composite price index for non-residential building construction increased by 1.4% in the first quarter compared with the previous quarter. This was the fourth consecutive quarterly advance.

All seven of the census metropolitan areas (CMAs) surveyed reported quarterly increases between 1.1% and 1.9%. Toronto (+1.9%) and Ottawa–Gatineau, Ontario part (+1.8%) recorded the largest gains.

Year over year, the composite price index for non-residential building construction was up 3.3%. Of the CMAs surveyed, Edmonton (+5.5%) and Ottawa–Gatineau, Ontario part (+4.9%) recorded the largest increases while Calgary (+1.6%) recorded the smallest advance.

Machinery and Equipment Price Index

(See table 8)

The Machinery and Equipment Price Index (MEPI) declined by 1.5% in the first quarter compared to the previous quarter. The import component decreased 2.2% over this period, while the domestic component fell 0.1%. Compared with the first quarter of 2010, the total MEPI decreased 2.9%, with the import and domestic components declining 4.3% and 0.5% respectively.

Except for the fishing, hunting and trapping that was unchanged, all other industries recorded decreases in the prices of machinery and equipment purchased in the first quarter. The largest contributor to the total MEPI decline was the manufacturing industry (-1.3%), led by the subcomponent transportation equipment manufacturing (-1.0%) and primary metal and fabricated metal product manufacturing (-1.2%). The second largest industry sector contributor to the quarterly decline of the total MEPI was the finance, insurance and real estate industry with a decrease of 1.6%.

Almost all commodities posted price decreases in the first quarter. Contributing most to the quarterly index decline of the total MEPI were computers and peripherals equipment such as terminals, printers and storage devices (-4.3%) and other industry specific machinery (-1.8%).

The Canadian dollar appreciated by 2.7% against the US dollar in the first quarter, while it gained 5.6% against its US counterpart from the same period last year. Variations in exchange rates can have a strong influence on the MEPI given the weight that imported machinery and equipment has in the index.

Electric Utility Construction Price Index

(See table 9)

Annual 2009 (final) and annual 2010 (preliminary)

Construction costs for the distribution systems series increased by 2.2% in 2010 compared with the 2009 annual index. Higher costs for labour (+4.4%) and construction indirects (+2.2%) were the major contributors to the advance of the index.

Construction costs for the transmission line system series rose 0.9% during 2010, while the transmission line component increased 1.9%, largely as a result of installation labour (+4.4%). The substation component edged up 0.3% in 2010, led by a 2.1% increase in the construction indirects component.

Compared with 2008 final data, the 2009 data show increases for both the distribution systems series (+0.5%) and the transmission line system series (+0.6%). The transmission line component declined by 0.7%, while the substation component increased by 1.4%.

Consulting Engineering Services Price Index

(See table 10)

2009 (preliminary data)

The Consulting Engineering Services Price Index (CESPI) is now available for 2009. The Consulting Engineering Services Price Index 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 Consulting Engineering Services Price Index increased 0.4% in 2009 compared with 2008.

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 2009 was 137.1 (2001 =100), an increase of 2.9% over the revised annual index of 133.3 for 2008. The revised indexes for 2007, 2006, 2005, 2004, 2003 and 2002 were 125.0, 120.0, 113.1, 107.8, 104.8 and 102.3 respectively.

Note: In 2009, all indexes were revised back to 2001. Calendar year averages of each input index are now used in the calculations. Also, revisions were made in the selection of a small number of inputs in order to improve the quality of the index.