Construction material costs have increased by four per cent year-over-year, which is double the Bank of Canada’s inflation target, according to the British Columbia Construction Association (BCCA).
The association’s semi-annual report indicates these sustained cost increases are raising the overall cost of building at a time when trade uncertainty and other pressures continue to contribute to B.C.’s affordability challenges.
“While overall inflation in B.C. and Canada has cooled, we continue to see construction material costs rise at a higher rate in B.C.’s construction sector,” said Chris Atchison, president, BCCA. “These pressures are driving construction costs higher at a time when trade uncertainty is already causing many to rethink their investments, creating a secondary impact across the industry.”
Even as costs rise, sector activity remains steady. Industrial, commercial, and institutional (ICI) permit values are up nine per cent year over year, and the number of multi-unit residential permits issued is up 10 per cent.
The estimated value of current major construction projects underway in B.C. is $158B, a decrease of seven per cent since last year, and an increase of 41 per cent over the past five years. Proposed major construction projects is $174B, which is an an increase of five per cent since last year, and a decrease of 21 per cent over the past five years.
The introduction of Prompt Payment legislation in October is a positive sign for the industry. The legislation is designed to ensure workers and businesses are paid on time for completed work, bringing British Columbia in line with other provinces across Canada. BCCA has been a leading advocate on this issue and continues to champion the Bill’s passage.
“There are many external pressures on our industry that we cannot control, but advocating for prompt payment and fairness across our industry is something we can,” added Atchison. “We look forward to working with the government to advance this legislation and provide contractors with relief from the ongoing pressures created by trade and payment uncertainty.”
