Canada market intelligence: uncertainty builds
Our Q1 2025 Canada market intelligence report provides market and provincial analysis for the region, as well as economic insights from our team of experts.
Economic overview
Canada's economic outlook is mixed. After a promising trajectory in late 2024, growth stalled in February 2025. Unstable trade policies are creating uncertainty, impacting business sentiment and employment.
The Bank of Canada's Q1 2025 survey indicates declining business activity and rising costs. Tariff disruptions and supply chain issues are impacting consumer prices.
Despite these challenges, the Canadian economy remains resilient, supported by new leadership and an increased focus on economic stability.
How market conditions are shaping escalation forecasts
While the Canadian construction industry is somewhat shielded from cost increases, a weaker currency and tariffs have added short-term cost pressures to materials. While wages continue to grow, their slower pace indicates a skills mismatch in the workforce, potentially exacerbated by the US trade war, increasing market slack.
With machinery and equipment costs still high, the slower growth rate provides some relief to industry stakeholders. Interest rate cuts to support a weakening economy may also make machinery and essential equipment more affordable.
Cost increases, however, may not outweigh, or negate, muted demand and as a result, escalation growth in 2025 could soften. Initially, costs may grow at a faster pace before negative trade effects and caution inhibit construction growth.
Navigating disruption
Facing increased uncertainty and volatility is not new to the construction industry. While the scale may be different, tariffs are not a new challenge. Effective collaboration can boost efficiency and foster innovation, while ultimately pushing the industry forward.
Most importantly, proactivity will allow for the best opportunity to guard against cost increases. Early supply chain engagement and contingency planning are key to minimising financial risk.
