Ontario Construction News staff writer
Construction Costs in Toronto have increased 14.40% in the year between April 2021 and April 2022, International property and construction consultancy firm Rider Levett Bucknall (RLB) says in its midyear Quarterly Cost Report
Toronto residential developers “are dealing with a labor scarcity and rising construction-materials costs, which will likely result in postponed project launches,” RLB says in its report. “Although home resales have slowed since the first interest rate hike, the new home or preconstruction market has remained active.
“This indicates that, while 2022 will be a colder year than 2021, it will still be a very solid year for the Toronto residential market.”
Meanwhile, non-residential investment is expected to contribute to the province expansion.
“In 2022, the province government plans to increase spending on public infrastructure by 11%. Expansion of public transportation and the construction of new motorways are two major undertakings. During the second half of 2022, the labor market is predicted to expand by 3.9%.”
Overall, in both Canada and the US, the construction industry is facing a significant workforce shortage that is hindering the industry’s ability to maximize the amount of construction activity that could be taking place, RLB says in a statement. “In the past two months, spending on nonresidential construction has declined, with many industry experts attributing this to the workforce shortage.”
“While facing workforce shortages is not a new challenge for our industry, the current shortage is one factor in a confluence of ongoing issues including the pandemic, supply chain challenges for raw materials and finished products, rising fuel prices, and the transportation industry’s own workforce shortage.”
“The workforce shortage is pervasive through every aspect of our industry right now,” said RLB North America president Julian Anderson. “While the workforce shortage is just one piece of a larger set of challenges we are facing right now, it’s important we strive to have the appropriate workforce numbers in place as we prepare for the future.”
Overall, in the US, the RLB Quarterly Cost Report notes:
- The U.S. quarterly national average increase in construction cost is approximately 2.4%, compared to 7.5% year-over-year;
- The U.S. Gross Domestic Product (GDP) has decreased at an annual rate of 1.5% following an increase of 6.9% in the previous quarter; and
- The Architectural Billings Index (ABI) soar to 58 from the previous quarter’s 51.