Analysis – First quarter 2013
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Industrial Product Price Index, Selected Construction Materials Series
(See table 2)
In the first quarter of 2013, the four largest quarterly price changes among the main commodities used in construction were in the architectural, structural and other groups, with four increases. Plywood, softwood excluding Douglas fir (+11.3%) posted the largest gain, followed by plywood, Douglas fir (+8.9%), particle board and waferboard (+6.9%) and diesel fuel (+6.6%).
Following a decline in the last quarter (-11.1%), prices for plywood, softwood excluding Douglas fir were up 11.3% in the first quarter of 2013. It was the largest quarterly increase since the third quarter of 2012.
Prices for plywood, Douglas fir rose 8.9% in the first quarter of 2013, in contrast to the 6.7% decline observed in the fourth quarter of 2012.
With this increase of 6.9%, prices for particle board and waferboard recorded a fifth straight quarterly advance. Prices had risen 8.1% in the fourth quarter of 2012.
Prices for diesel fuel rose 6.6% in the first quarter of 2013, the second consecutive quarterly gain. Prices had increased 2.1% in the fourth quarter of 2012.
Compared with the first quarter of 2012, the four largest price changes among the main commodities used in construction were in the architectural and structural groups, with three increases and one decrease. Particle board and waferboard (+43.3%), plywood, softwood excluding Douglas fir (+27.9%) and plywood, Douglas fir (+21.8%) posted the biggest price increases, while structural shapes, steel including fabricated (-14.6%) saw the largest decrease.
Compared with the first quarter of 2012, prices for particle board and waferboard rose 43.3%, a fourth consecutive year-over-year increase. Prices had risen 51.5% in the fourth quarter of 2012, on a year-over-year basis.
Compared with the same quarter one year earlier, prices for plywood, softwood excluding Douglas fir advanced 27.9%, a sixth straight year-over-year increase. Prices rose 17.3% in the fourth quarter of 2012, on a year-over-year basis.
Compared with the first quarter of 2012, prices for plywood, Douglas fir increased 21.8%, for a fifth consecutive year-over-year gain. Prices were up 14.6% in the fourth quarter of 2012, on a year-over-year basis.
Compared with the same quarter one year earlier, prices for structural shapes, steel including fabricated fell 14.6%, a third straight year-over-year decrease. Prices declined 12.1% in the fourth quarter of 2012, on a year-over-year basis.
Construction Union Wage Rates Index
(See table 4)
The Canada Total Construction Union Wage Rate Index (including supplements) increased by 0.2% in the first quarter of 2013. It increased 2.2% compared with the first quarter of 2012.
On a regional basis, the index for the Prairie Region registered the highest quarterly change (+0.4%), followed by British Columbia (+0.2%) and the Atlantic Region (+0.1%). Quebec and Ontario remained unchanged from the previous quarter.
New Housing Price Index
(See table 5)
The New Housing Price Index (2007=100) rose 0.5% in the first quarter of 2013 following identical increases in third and fourth quarters of 2012. The Atlantic Region (+0.5%), Quebec (+0.2%), Ontario (+0.3%), as well as the Prairie Region (+0.9%) all posted increases, while British Columbia (-0.3%) recorded a second consecutive quarterly decrease.
In the Atlantic Region, Halifax was up 1.0% from last quarter due to higher material and labour costs, market conditions and higher prices for developed land. Charlottetown recorded an increase of 0.4%; primarily due to builders returning to regular list pricing after having recorded lower negotiated selling prices last quarter. St. John’s (+0.1%) saw a slight price increase due to higher material and labour costs and higher prices for developed land. Prices in the aggregated metropolitan region of Saint John, Fredericton and Moncton remained unchanged from last quarter.
In Quebec, higher material costs as well as market conditions contributed to the increase in Montréal (+0.2%), while in Québec (+0.1%), higher land prices was the primary reason for the increase in the first quarter.
Market conditions, increased material and labour costs, as well as higher land development costs contributed to the increases observed in Ontario. St. Catharines-Niagara recorded the largest quarterly price advance (+1.1%), followed by London (+0.5%) and the combined metropolitan region of Toronto and Oshawa (+0.4%). Increases were also observed in Hamilton, Windsor as well as in Greater Sudbury and Thunder Bay (+0.2% for all three regions). Quarterly decreases were observed in Ottawa-Gatineau (-0.2%) and Kitchener-Cambridge-Waterloo (-0.1%).
Higher land development costs, as well as increased material and labour costs contributed to the increases in the Prairie Region this quarter. Winnipeg (+1.7%) posted the largest increase followed by Calgary (+1.6%) and Regina (+1.1%). Saskatoon saw a 0.3% increase due entirely to the higher cost for developed land while Edmonton saw a slight rise of 0.1%.
In British Columbia, prices decreased in Vancouver (-0.4%) and Victoria (-0.2%) as some builders recorded lower negotiated selling prices and others lowered their prices as a result of market conditions.
Apartment Building Construction Price Index
(See table 6)
The composite price index for apartment building construction decreased 0.1% in the first quarter compared with the previous quarter. Indexes for the mechanical and electrical trades reflected lower commodity prices, while contractors reported little or no change in the architectural and structural trades.
Of the seven census metropolitan areas (CMAs) surveyed, three reported quarterly increases. The index rose 0.1% in Edmonton and Vancouver and 0.2% in Calgary. Ottawa (-0.5%) reported the largest decrease.
Year over year, the composite price index for apartment building construction was up 1.0%. Of the CMAs surveyed, Calgary (+1.6%) recorded the largest year-over-year increase while Ottawa (+0.5%) recorded the smallest gain from the first quarter of 2012.
Non-residential Building Construction Price Index
(See table 7)
The composite price index for non-residential building construction was unchanged in the first quarter, following 11 consecutive quarterly increases. Contractors reported that price increases in the architectural and structural trades were offset by lower commodity prices in the mechanical and electrical trades.
Of the seven census metropolitan areas (CMAs) surveyed, four (Halifax, Calgary, Edmonton and Vancouver) reported quarterly increases of 0.1%. Ottawa (-0.5%) reported the largest decrease, followed by Toronto (-0.1%).
Year over year, the composite price index for non-residential building construction was up 1.1%. Among the CMAs surveyed, Halifax (+1.5%) recorded the largest year-over-year increase while Ottawa (+0.4%) recorded the smallest gain compared with the first quarter of 2012.
Machinery and Equipment Price Index
(See table 8)
The Machinery and Equipment Price Index (MEPI) rose 1.2% in the first quarter compared with the previous quarter. The import component was up 2.0% over this period, while the domestic component increased 0.1%.
All industries posted increases in prices of machinery and equipment purchased in the first quarter. The largest contributor to the total MEPI quarterly increase was manufacturing (+1.4%), with the transportation equipment manufacturing sub-component advancing 1.4% and the primary metal and fabricated metal product manufacturing sub-component up 1.5%. The second largest contributor to the total MEPI quarterly increase was finance, insurance and real estate (+0.9%).
On a commodity basis, most commodities posted price increases in the first quarter. Among these, other industry specific machinery (+1.5%) and construction machinery (+3.5%) contributed the most to the quarterly increase of the total MEPI.
The Canadian dollar depreciated 1.7% against the US dollar in the first quarter compared with the previous quarter. Variations in exchange rates can have a strong influence on the MEPI given the high weight that imported machinery and equipment have on the index.
Compared with the first quarter of 2012, the total MEPI increased 1.1%, with the import component up 2.0% and the domestic component down 0.1%. The movement in the import component was partly influenced by the year-over-year change in the Canadian dollar (-0.8%) against the US dollar.
Electric Utility Construction Price Index
(See table 9)
Annual 2012
Construction costs for the electric utility distribution systems series increased by 0.9% in 2012 compared with the 2011 annual index. Higher costs for labour (+2.9%) and construction indirects, which includes engineering, administration and overheads (+1.4%), were the major contributors to the increase of the index.
In 2012, construction costs for the transmission line systems series rose 0.2%, while the transmission line component declined 0.1%, largely as a result of lower material costs (-1.9%). The substation component rose 0.5%, led by a 2.5% increase in labour costs.
Consulting Engineering Services Price Index
(See table 10)
2011
The Consulting Engineering Services Price Index (CESPI) increased 2.0% in 2011 compared with 2010.
Prices rose for 7 of the 11 engineering specializations covered by CESPI, led by oil, petroleum and natural gas (+6.9%). Other engineering services (+4.5%) and buildings (+3.7%) also notably contributed to the overall CESPI increase.
Prices of engineering services in power generation and transmission; mining, metallurgy and primary metals; and foreign decreased in 2011 compared with 2010.
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 2012 was 149.4 (2001 =100), an increase of 2.7% over the annual index of 145.5 for 2011. The indexes for 2010, 2009, 2008, 2007, 2006, 2005, 2004, 2003 and 2002 were 141.0, 136.7, 133.3, 125.0, 120.0, 113.1, 107.8, 104.8 and 102.3 respectively.
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