PHOENIX — International property and construction consultancy firm Rider Levett Bucknall (RLB) has released its latest Quarterly Cost Report, providing new insights into the unpredictability of costs in the North American construction industry in 14 markets.
The report showed the average increase in construction costs across North America was 1.56 per cent over the previous quarter, with Chicago, Denver, Las Vegas and San Francisco experiencing increases over the U.S. national average in the first quarter of 2023. Boston, Honolulu, Las Angeles, Portland, Seattle and Washington D.C. experienced gains that were less than the national average.
The Toronto cost index was up 1.84 per cent in Q1, an increase from 1.76 from the previous quarter.
“As we approach the halfway point of 2023, the economic uncertainty hasn’t become any clearer as the year progresses. That uncertainty looms large as economic and workforce shortages concern the construction industry,” said Julian Anderson, president of RLB North America, in a statement. “While demand for construction remains strong, possible inflation, bank failures and recession fears still feed the uncertainty and a potential slowdown for 2024.”
The U.S. quarterly national average increase in construction cost is 1.56 per cent, compared to 7.22 per cent year-over-year.
The report stated as continuous activity in both residential and non-residential sectors in the Toronto market boosts employment to higher levels and adds pressure to already tight recruiting conditions, labour market issues may persist across Ontario’s construction industry.
In Q1 of this year, condo sales in the GTA reached a 14-year low. In the same period, unsold inventories reached a seven-year high, and prices increased at the slowest rate in eight years. RLB stated high rates of immigration will lead to increased demand in the Toronto housing market.
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