(Source: Daily Commercial News)
The year-over-year change for total construction in May 2009 was -7.9%. This was comprised of residential construction at +1.6%, non-residential buildings at -5.1% and engineering work at -15.7%. Material cost changes may still be sleeping lightly, but there are signs that they are starting to stir.
The residential materials cost index has been essentially flat for the past four years. A heavy weighting in the residential materials index goes to lumber prices. Lumber prices have been on a downward trajectory since early in 2006, which was when U.S. housing starts began their steep descent. In the most recent period, weak Canadian housing starts have had a significant impact on lumber prices regionally. For example, softwood lumber is -12.4% in Ontario versus six months ago and -6.7% in B.C. versus three months ago.
Read Alex Carrick’s full article “Some Canadian construction material costs are waking up from their slumber” in the Daily Commercial News and Construction Record (August 11, 2009)