Canada’s national statistics agency has released new data on construction costs and the price of building materials in Canada — and to no one’s surprise, the data shows a steep year-over-year increase in lumber prices.
According to Statistics Canada, softwood lumber prices rose by an astounding 118.9 percent in Canada between March 31, 2020, and March 31, 2021.
The year-over-year increase, the largest ever reported by StatsCan, was the result of low domestic lumber stocks caused by a temporary shutdown of sawmills in early 2020 due to the COVID-19 pandemic.
Mill closures and reduced output was followed by high Canadian demand for lumber products in late 2020 and early 2021.
In March 2021 alone, Canadian softwood lumber prices rose by nearly 12 percent, and prices for veneer and plywood products rose by more than 20 percent, the agency said.
As a result, overall construction costs for residential and non-residential buildings are up in all parts of the country.
In the three month period ending March 31, overall residential construction costs jumped by 16.8 percent in Calgary, 15 percent in Toronto and 14.6 percent in Ottawa.
“Higher construction costs overall were mostly attributable to a shortage of construction materials,” Statistics Canada said in a May 6 release.
“The demand for materials continued to be high as building materials and supplies sold by wholesalers were up 19.1 percent year over year in February,” StatsCan added.
“The surge in residential construction costs was also spurred by historically low interest rates and a desire for more living space during the pandemic.”
According to Statistics Canada, investment in residential construction continued to rise in the first quarter of 2021, mostly driven by the growth of single-family home construction.
The value of residential construction investments in Canada has now reached a new record level in every month since September 2020.
In February, investments in residential construction across Canada were estimated at $12.3 billion.
In the first quarter of 2021, prices for residential building construction increased 5.6 percent — the largest quarterly increase since StatsCan started keeping data on residential construction costs in 2017.
Canadian warehouse space is also at a premium in the wake of record year-over year increases in retail e-commerce sales, the agency said.
On a year-over-year basis, retail e-commerce sales rose by nearly 117 percent in January 2021 and 92 percent in February 2021.