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Special Report

Canada Construction Outlook

February 2024

Recovery of Construction Activity In the
Making as Tailwinds Gather Momentum

Easing construction costs pave path for rising building activity. Canada’s construction sector faced multiple challenges after the onset of the pandemic and in the following years. The disruption of global  supply chains caused steep price increases in major building materials, and the restructuring of the job market deepened labour shortages. Rising interest rates compounded these issues by making financing  less accessible. These increases in construction costs squeezed development yields, narrowed the premium for new construction, and resulted in delays and sometimes outright cancellations for a variety of residential and nonresidential projects. However, some of these challenges have faded meaningfully as Canada and the rest of the world emerged from the health crisis. A recovery in construction activity is expected over the latter parts of 2024 and into 2025 as tailwinds increasingly take form.

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