Analysis – First Quarter 2012
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Industrial Product Price Index, Selected Construction MaterialsSeries
(See Table 2)
In the first quarter of 2012, the four largest quarterly price changes in the main commodities used in construction were three decreases and one increase in the architectural group. Building paper, coated saw the biggest decrease (-6.7%), followed by carpets in rolls (-5.3%) and clay products, not elsewhere specified (-2.6%). Wooden doors had the largest increase (+2.5%).
After experiencing three consecutive quarterly increases, prices for building paper, coated fell 6.7% in the first quarter of 2012. Prices had risen 3.1%, 3.3% and 2.5% respectively in the last three quarters of 2011.
Prices for carpets in rolls were down 5.3%, the second straight quarterly decrease. This decline in the first quarter of 2012 was bigger, however, than in the fourth quarter of 2011 (-1.9%).
In the first quarter of 2012, prices for clay products, not elsewhere specified fell 2.6%. This is the biggest drop since the fourth quarter of 2009.
After remaining stable throughout 2011, wooden door prices rose 2.5% in the first quarter of 2012.
Compared with the first quarter of 2011, the four biggest price changes in the main commodities used in construction were observed in the structural, mechanical and "other" groups. Diesel fuel (+10.1%) and pipe fittings, rubber or plastic (+4.7%) comprised the two biggest increases, while the two largest decreases were in particleboard and waferboard (-13.8%) and prefabricated buildings, wood frame (-6.9%).
In comparison with the same quarter the previous year, diesel fuel prices continued to climb, with a 10.1% increase. This was the ninth consecutive year-over-year advance. Prices grew steadily in 2011, posting quarterly increases of 25.7%, 33.4%, 32.9% and 24.9%, respectively.
Prices for pipe fittings, rubber or plastic rose 4.7% compared with the first quarter of 2011. Its growth slowed slightly, with prices having increased 5.7% and 5.0% respectively in the last two quarters of 2011.
Prices for particleboard and waferboard, when compared with the same quarter a year earlier, fell 13.8%. Year over year, this was a sixth straight decline and the biggest. In the four quarters of 2011, prices had decreased 3.4%, 12.9%, 6.5% and 10.2%, respectively.
Compared with the first quarter of 2011, prices for prefabricated buildings, wood frame declined 6.9%. This was the seventh consecutive year-over-year decrease. Prices had respectively fallen 0.2%, 1.2%, 6.9% and 6.9% during 2011.
Construction Union Wage Rates Index
(See table 4)
In the first quarter of 2012, the Canada Total Construction Union Wage Rates Index (including supplements) was unchanged compared with the previous quarter. It was 2.1% higher compared with the first quarter of 2011.
On a regional basis, the index for the Atlantic Region registered the highest quarterly change (+0.4%), followed by Ontario (+0.1%). Quebec, the Prairie Region and British Columbia were unchanged from the previous quarter.
New Housing Price Index
(See table 5)
The New Housing Price Index (2007=100) increased 0.6% in the first quarter of 2012 following a similar increase the previous quarter. The Atlantic Region (+0.1%), Québec (+0.6%) as well as Ontario (+0.9%) and the Prairie Region (+0.4%) all posted increases, while British Columbia (-0.2%) recorded its third consecutive quarterly decrease.
In the Atlantic Region the primary reason for the increase was higher material and labour costs. Halifax (+0.8%) was the only metropolitan area in the Atlantic region to post an increase from last quarter. St. John's (-0.2%) Charlottetown (-0.5%) and Saint John, Fredericton and Moncton (-0.3%) all recorded decreases in the first quarter of 2012.
In the Quebec Region, both Québec (+1.0%) and Montréal (+0.4%) recorded price increases in the first quarter, as a result of higher land values, increased land development costs and increased costs of material and labour.
Competitive market conditions, increased material and labour costs and the introduction of new building codes in the province contributed to the increases in Ontario in the first quarter of 2012. Increases were observed in the metropolitan regions of Toronto and Oshawa as well as Windsor (both +1.1%), St. Catharines- Niagara (+1.0%), Ottawa-Gatineau (+0.8%) as well as Kitchener-Cambridge-Waterloo (+0.6%) and Hamilton (+0.4%). London as well as Greater Sudbury and Thunder Bay remained unchanged from the previous quarter.
Increased land values as well as higher land developments costs contributed to the increases in the Prairie Region this quarter. Regina (+1.7%) Saskatoon (+1.1%), Winnipeg (+0.6%), Calgary (+0.5%), and Edmonton (+0.1%) all experienced increases from last quarter.
In British Columbia, Victoria (-1.0%) posted its 7th consecutive quarterly decrease as builders lowered their prices to stimulate sales in a competitive market. Vancouver (-0.1%) also posted a decrease in the first quarter of 2012 as builders reported lower negotiated selling prices.
Apartment Building Construction Price Index
(See table 6)
The composite price index for apartment building construction increased 0.8% in the first quarter compared with the previous quarter. The quarterly increase was mainly a result of continued strength in the residential construction market as well as higher construction material prices.
All of the seven census metropolitan areas (CMAs) surveyed reported quarterly increases varying from 0.4% to 1.7%. Calgary and Vancouver (both +1.7%) posted the largest increases, followed by Edmonton (+1.6%).
Year over year, the composite price index for apartment building construction was up 3.3%. Of the CMAs surveyed, Calgary and Edmonton (both +4.7%) recorded the largest year-over-year increases, while Halifax and Montréal (both +2.7%) recorded the smallest gains.
Non-residential Building Construction Price Index
(See table 7)
The composite price index for non-residential building construction increased 1.0% in the first quarter compared with the previous quarter. The quarterly increase was mostly a result of continued strength in the construction sector resulting in some construction material price increases, notably in Western Canada.
All of the seven census metropolitan areas (CMAs) surveyed reported quarterly increases varying from 0.5% to 1.7%. Edmonton (+1.7%) as well as Vancouver and Calgary (both +1.6%) recorded the largest gains.
Year over year, the composite price index for non-residential building construction was up 3.7%. Of the CMAs surveyed, Edmonton (+4.6%) and Calgary (+4.5%) recorded the largest year-over-year increases, while Halifax (+2.3%) recorded the smallest gain.
Machinery and Equipment Price Index
(See table 8)
The Machinery and Equipment Price Index (MEPI) decreased 1.0% in the first quarter compared with the previous quarter. The import component was down 1.7% over this period, while the domestic component was up 0.1%.
All industries posted decreases in prices of machinery and equipment purchased in the first quarter. The largest contributor to the total MEPI quarterly decline was finance, insurance and real estate (-1.5%), in which the finance and insurance sub-component declined 1.3% and the real estate and rental and leasing services sub-component was down 1.7%. The second-largest contributor to the quarterly decline was manufacturing (-0.9%).
On a commodity basis, most commodities posted price decreases in the first quarter. Among these, automobiles excluding passenger vans (-2.7%) and other industry specific machinery (-1.2%) contributed the most to the quarterly decrease of the total MEPI.
The Canadian dollar appreciated 2.2% against the US dollar in the first quarter compared with the previous quarter. Variations in exchange rates can have a strong influence on the MEPI given the high weight that imported machinery and equipment has on the index.
Compared with the first quarter of 2011, the total MEPI increased 2.6%, with the import component rising 3.7% and the domestic component up 1.0%. The movement in the import component was partly influenced by the year-over-year change in the Canadian dollar (-1.5%) against the US dollar.
Electric Utility Construction Price Index
(See table 9)
Annual 2010 (Final) and annual 2011 (preliminary)
Construction costs for the electric utility distribution systems series increased 3.3% in 2011 compared with 2010. Higher costs for labour (+6.4%) and construction indirects (+5.9%), which includes engineering, administration and overheads, were the major contributors to the advance in the index.
In 2011, construction costs for the transmission line system series rose 2.4%, while the transmission line component increased 3.5%, largely as a result of installation labour (+6.2%). The substation component increased 1.7%, led by a 4.9% increase in the construction indirects component.
Consulting Engineering Services Price Index
(See table 10)
2010 (preliminary)
The Canada total Consulting Engineering Services Price Index increased 4.1% in 2010 compared with 2009.
Prices rose for all specializations, except environmental services, ranging from gains of 1.5% for other engineering services, to 8.9% for buildings.
Infrastructure Construction Price Index
An analytical price index series measuring annual changes in the cost of municipal infrastructure construction funded by development charges has been developed by Statistics Canada on behalf of the City of Ottawa. The annual index for 2011 was 145.5 (2001 =100), an increase of 3.2% over the revised annual index of 141.0 for 2010. The indexes for 2009, 2008, 2007, 2006, 2005, 2004, 2003 and 2002 were 136.7, 133.3, 125.0, 120.0, 113.1, 107.8, 104.8 and 102.3 respectively.
Note: In 2009, all indexes were revised back to 2001. Calendar year averages of each input index are now used in the calculations. Also, revisions were made in the selection of a small number of inputs in order to improve the quality of the index.
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