Canada market intelligence: finely balanced
Our Q2 2024 Canada market intelligence report provides market and provincial analysis for the region, as well as economic insights and advisory from our team of experts.
Economic and construction market overview
The Canadian economy started 2024 on a positive note, lifted by a softening of inflation, followed by a trim to interest rates. Confidence has risen as a result, but the real impact is likely to be felt next year as the economy continues to struggle.
Construction activity has improved, recording output growth for the first time since 2022. Institutional and governmental construction spending is buoyant and targeted residential incentives from the Federal Budget 2024 may be filtering through into some new housing starts.
Little change is evident from a provincial perspective, with performance largely stable and in a similar position to the previous three months.
How market conditions are shaping escalation forecasts
Construction escalation remains on an upward trajectory but is becoming more manageable and less volatile. Our 2024 escalation estimate has increased slightly from 3.0 percent to 3.25 percent. Reduced interest rates could also filter into increased optimism and improved workloads towards the end of the year.
Increasing cost of materials, labour and equipment
From a supply chain perspective, input costs have hardened. Many construction materials increased in Q1 2024, following raw material cost growth. Labour, machinery and equipment costs continue to increase, albeit at softer rates of growth.
