Analysis – Second quarter 2013
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Industrial Product Price Index, Selected Construction Materials Series
(See table 2)
In the second quarter of 2013, the four biggest quarterly price changes among the main commodities used in construction were in the architectural, mechanical and other groups, with one increase and three decreases. Pipe fittings, rubber or plastic (+8.9%) posted the largest gain, while plywood, Douglas fir (-13.9%), plywood, softwood excluding Douglas fir (-13.7%), and diesel fuel (-6.5%) had the largest declines.
After declining 1.2% in the last quarter, prices for pipe fittings, rubber or plastic rose 8.9% in the second quarter of 2013. It was the largest quarterly increase since the first quarter of 2010.
Prices for plywood, Douglas fir declined 13.9% in the second quarter of 2013, in contrast to the 7.9% rise in the previous quarter. It was the biggest decline since the fourth quarter of 2009.
After an increase of 11.1% in the previous quarter, prices for plywood, softwood excluding Douglas fir decreased 13.7% in the second quarter of 2013. It was the largest decline since the second quarter of 2005.
Prices for diesel fuel fell 6.5% in the second quarter of 2013, compared with the 6.1% increase recorded in the previous quarter. It was the largest quarterly decrease since the first quarter of 2009.
Compared with the second quarter of 2012, the four biggest price changes among the main commodities used in construction were in the structural, mechanical and electrical groups, with three increases and one decrease. Particle board and waferboard (+37.4%), pipe fittings, rubber or plastic (+13.4%) and switchboards, 1,000 volts or less (+9.0%) posted the largest gains, while structural shapes, steel including fabricated (-14.4%) saw the biggest decline.
Compared with the second quarter of 2012, prices for particle board and waferboard were up 37.4%, a fifth consecutive year-over-year increase.
Compared with the same quarter one year earlier, prices for pipe fittings, rubber or plastic rose 13.4%, the largest year-over-year advance since the fourth quarter of 2010.
Compared with the second quarter of 2012, prices for switchboards, 1,000 volts or less were up 9.0%, the same year-over-year increase as in the previous two quarters.
Compared with the same quarter one year earlier, prices for structural shapes, steel including fabricated fell 14.4%, a fourth straight year-over-year decrease.
Construction Union Wage Rates Index
(See table 4)
The Canada Total Construction Union Wage Rate Index (including supplements) increased by 0.2% in the second quarter of 2013. It increased 1.3% compared with the second quarter of 2012.
On a regional basis, the index for the Atlantic Region registered the highest quarterly change (+1.9%), followed by British Columbia (+0.4%) and the Prairie Region (+0.2%). Quebec and Ontario remained unchanged from the previous quarter.
New Housing Price Index
(See table 5)
The New Housing Price Index (2007=100) rose 0.4% in the second quarter of 2013 following three consecutive quarterly increases of 0.5%. This was the smallest national increase since the 4th quarter of 2010. The Atlantic Region (+0.7%), Quebec (+0.2%), Ontario (+0.3%), as well as the Prairie Region (+0.9%) all posted increases, while British Columbia (-0.2%) recorded a third consecutive quarterly decrease.
In the Atlantic Region, St. John’s was up 1.1% from last quarter due to higher material and labour costs and higher prices for developed land. Charlottetown and Halifax recorded increases of 0.5% each; primarily due to market conditions. Saint John, Fredericton and Moncton saw a slight price increase (+0.2%) due to higher material costs.
In Quebec, higher material costs as well as market conditions contributed to the increase in Montréal (+0.2%), while in Québec (+0.1%), new energy star standards for homes contributed to the increase in the second quarter.
Market conditions, increased material and labour costs, as well as higher land development costs contributed to the increases observed in Ontario. Hamilton recorded the largest quarterly price advance (+1.1%), followed by St. Catharines-Niagara (+0.8%) and the combined metropolitan region of Sudbury and Thunder Bay (+0.5%). Increases were also observed the combined metropolitan region of Toronto and Oshawa, in London (+0.3% for both regions) as well as in Windsor (+0.2%) and in Kitchener-Cambridge-Waterloo (+0.1%). Ottawa-Gatineau recorded a second consecutive quarterly decrease (-0.1%).
Increased material and labour costs, market conditions, as well as higher land development costs, contributed to the increases in the Prairie Region this quarter. Calgary (+1.8%) posted the largest increase followed by Winnipeg and Regina (both +1.2%). Saskatoon saw a 0.8% increase while Edmonton saw a slight rise of 0.2%.
In British Columbia, prices decreased in Vancouver (-0.2%) as some builders recorded lower negotiated selling prices or lowered their prices as a result of market conditions. Victoria remained unchanged from last quarter.
Apartment Building Construction Price Index
(See table 6)
The composite price index for apartment building construction rose 0.8% in the second quarter compared with the previous quarter. The quarterly increase was mainly attributable to a rise in the price of building materials in British Columbia because of the return to the provincial sales tax in April.
Of the seven census metropolitan areas (CMAs) surveyed, six reported quarterly gains ranging from 0.2% to 2.5%. The largest advance was in Vancouver (+2.5%), followed by Halifax (+0.6%). Ottawa (-0.1%) recorded the lone decline.
Year over year, the composite price index for apartment building construction was up 1.3%. Of the CMAs surveyed, Vancouver (+3.1%) recorded the largest year-over-year gain, while Ottawa recorded a 0.3% decline from the second quarter of 2012.
Non-residential Building Construction Price Index
(See table 7)
The composite price index for non-residential building construction rose 0.5% in the second quarter compared with the previous quarter. The increase was mainly attributable to a rise in the price of building materials in British Columbia because of the return to the provincial sales tax in April.
Of the seven census metropolitan areas (CMAs) surveyed, six reported quarterly increases ranging from 0.1% to 2.4%. The largest gain was in Vancouver (+2.4%), followed by Halifax (+0.6%). Contractors in Ottawa (-0.1%) reported the lone decline.
Year over year, the composite price index for non-residential building construction was up 0.9%. Of the CMAs surveyed, Vancouver (+2.9%) recorded the largest year-over-year increase, while Ottawa (-0.3%) recorded the lone decrease compared with the second quarter of 2012.
Machinery and Equipment Price Index
(See table 8)
The Machinery and Equipment Price Index (MEPI) rose 0.9% in the second quarter compared with the previous quarter. The import component was up 1.4% over this period, while the domestic component was unchanged.
The Canadian dollar depreciated 1.4% against the US dollar in the second 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 has on the index.
All industries posted increases in prices of machinery and equipment purchased in the second quarter. The largest contributor to the total MEPI quarterly increase was manufacturing (+1.1%), with both the transportation equipment manufacturing sub-component and the primary metal and fabricated metal product manufacturing sub-component up 1.2%. The second largest contributor to the quarterly increase was finance, insurance and real estate (+0.6%).
On a commodity basis, most commodities posted price increases in the second quarter. Among these, other industry specific machinery and other agricultural machinery contributed the most to the quarterly increase of the total MEPI (both up 1.5%).
Compared with the second quarter of 2012, the total MEPI increased 1.3%, with the import component up 2.4% and the domestic component down 0.5%. The movement in the import component was partly influenced by the year-over-year change in the Canadian dollar (-1.3%) against the US dollar.
Electric Utility Construction Price Index
(See table 9)
First half 2013
Construction costs for the electric utility distribution systems series decreased by 1.4% in the first half of 2013 compared with the 2012 annual index. Lower costs for labour (-4.8%) and total direct costs, which includes materials and distribution systems equipment (-1.4%), were the major contributors to the decrease of the index.
In the first half of 2013, construction costs for the transmission line systems series rose 0.5%. The transmission line component decreased by 1.5%, largely as a result of lower costs for poles, towers, fixtures and overhead conductors (-1.8%) and installation labour (-4.8%). The substation component increased 1.8%, led by a 2.0% increase in station equipment 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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