Canada market intelligence: cautious optimism
Our Q4 2024-2025 Canada market intelligence report provides market and provincial analysis for the region, as well as economic insights from our team of experts. This edition also features our 2025 cost guide. See our summary below and read the full report to learn more.
Economic and construction market overview
Canadian Gross Domestic Product remains steady, with interest rates falling and inflation becoming more manageable. Yet signs of strain are beginning to emerge as the labour market continues to underwhelm and the unemployment rate remains elevated.
Despite uncertainty, Canada’s construction market shows signs of growth and confidence for the first time in four quarters.
Political and economic uncertainty
Political developments, including Prime Minister Trudeau’s resignation and potential US tariffs under a Trump presidency, introduce risks that could destabilise growth, disrupt supply chains and affect both public and private sector investments.
Despite these geopolitical tensions, the Canadian economy continues to navigate a period of modest growth.
How market conditions are shaping escalation forecasts
Canada’s construction sector showed cautious signs of improvement in Q3 2024, recording its first Gross Value Added growth period since Q2 2023. Construction cost escalation continues to slowly build but is inconsistent. Factors informing our escalation forecasts are:
Current activity: lower interest rates, curbing escalation growth and increased affordability are starting to unlock projects, although activity remains weak.
Leading indicators: building permits have been boosted by improving market conditions, construction start forecasts look healthy and confidence is improving.
Materials cost and availability: suppressed global demand is steadily contributing to more manageable cost pressures and lead time recalibration. Potential tariffs and their impacts, remain a concern.
Workforce: wage growth continues to moderate as jobs vacancies fall and employment opportunities dampen. Skills shortages are prevalent, particularly for specialist trades.
Machinery and equipment: lower finance charges and increased access to loans are helping to moderate cost growth. A high volume of infrastructure work is adding to pressures, though.
The year ahead
Increased competition for bids towards the end of 2024 is expected to carry over into 2025 and spur further growth in the construction market.
Canada’s construction sector continues to grow with security in large projects as well as increased competition for smaller, fast turnaround projects.
Despite the uncertainties ahead in 2025, the overall market outlook remains positive.
