As inflation and interest rates took their toll, 2022 saw the highest increase in non-residential construction costs in over four decades. StatCan_eng | realestate realestatenews construction interestrates inflation
As inflation grew and interest rates rose in 2022, compounding with the supply chain issues and labour shortages that resulted from the pandemic, the cost of construction grew accordingly, forcing many developers and builders to pause and reassess.that quantifies those construction cost increases, and puts what we saw in 2022 in context.
Non-residential buildings include commercial buildings such as offices and warehouses, as well as industrial buildings including factories and bus depots with maintenance facilities, and Statistics Canada attributes the cost increases to the rising costs of wood, plastic, structural steel framing, and metal fabrications required for these buildings.
By region, non-residential construction costs increased the most in Toronto , followed by Ottawa , then Montréal . Each of the 11 CMAs saw their highest annual construction cost increase since the Index’s inception in 1981, except for Calgary, Edmonton, and Vancouver, which saw a significant increase in 2007.
In December, Ontario accounted for most of the growth , seeing a 2.7% increase in non-residential construction investment. By building type, investment in industrial construction saw an increase of $2.1B, an increase for the 13th consecutive month, evidence that the demand for industrial space has been strong enough to outweigh rising construction costs.Like non-residential construction, residential construction saw cost increases as well in 2022, with the 11-CMA composite price index rising 19.
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