Canada market intelligence fall report 2022

Gerard McCabe

Managing Director

North America

Our latest market intelligence report for Canada provides market analysis, sector insights, and supply chain capacity data for each province covered in the study. High inflation, slowing growth and continued supply chain constraints have all taken their toll on the Canadian construction industry in the last quarter.

Economic overview

Canada’s economy has largely been on an upward trajectory in the first half of 2022, however, global supply chain constraints continue to disrupt international exports and will impact Canada’s growth over the next few quarters.

Inflation has climbed for much of the year peaking at 8.1 percent in June but remains persistently high. This prompted the Bank of Canada to raise rates to 3.25 percent with a 100-basis point increase in July 2022 and another 75 basis points in September.

The change reflects the challenge for businesses adjusting to both economic change and uncertainty, which is directly impacting business confidence.

Supply chain constraints

Locally the construction industry is feeling the impact of inflation with prices of raw materials increasing significantly over the last 12 months. For example, the raw materials price index from Statistics Canada shows that categories of common construction materials such as gravel and clay have risen 8 percent since last summer.

Products continue to experience supply chain constraints impacting product availability resulting in delays to project timelines.

Mixed results across the provinces

Housing starts and building permits provide insight into the future demand for housing and commercial buildings. In the last quarter we saw some mixed results across the provinces as the Bank of Canada started to tighten interest rates and the housing market cooled off.

Alberta and British Columbia had the strongest performance with double-digit growth, reflecting the strength of the natural resources sectors in Western Canada.

This strong performance is attracting investment and higher interprovincial migration, to Alberta in particular. Therefore, we expect demand for construction to continue to be strong in this part of the country for the remainder of 2022.

For all the analysis and insights on the Canadian construction market, download the full report by completing this short form.

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