Costs of construction essentials, such as labor and materials, across all building types (residential, commercial and agricultural) remained inflated during Q2 22 throughout the US and Canada.
Highlights of Construction Costs in Q2 22
- Residential reconstruction costs increased +12% y/y in the US and over +6% y/y in Canada.
- Most of these cost hikes occurred between Q2 21 – Q3 21.
- Building permits in the US increased +7% y/y in March 2022.
- Building permits for 5+ housing units increased +36% y/y.
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Key:
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Economic Indicators
With significant disruptions to the US economy over the course of the pandemic, home prices have skyrocketed. Prices of existing homes have soared +18% and prices of new home stock have increased +19%.
Take a look at some key economic indicators by quarterly comparisons.
(All data presented here has been sourced from the US Bureau of the Census, National Association of Realtors, US Bureau of Labor Statistics, The Conference Board, Freddie Mac and CoreLogic.)
Q4 21 Q1 22
Housing Starts 1,870 1,753
Building Permits 1,752 1,878
Home Sales 6,967 6,878
New 764 814
Existing 6,203 6,083
Consumer Confidence 112.9 108.1
30-Year Fixed Mortgage Rate 3.1% 3.8%
Q1 21 Q1 22
Home Price Y/Y Change
New 2.4% 18.1%
Existing 11.1% 20.9%
Changes in Individual Material Costs Since Beginning of Pandemic
Costs for many individual building materials have continued to surge in both the US and Canada since the onslaught of the COVID pandemic. Strong demand and supply shortages for those materials have kept costs high to this day. For example, PVS has seen a significant cost increase of between 100% – 200% across the US and Canada because of its petroleum base used in manufacturing.
Take a look at some of essential material cost comparisons from March 2020 to March 2022, according to CoreLogic:
Material US Canada
Copper Wire +160% +130%
Plywood +116% +86%
Lumber +106% +100%
Copper Pipe +83% +52%
Steel Stud +74% +51%
Asphalt Shingles +14% +12%
Comparison of Labor Costs in US & Canada
Skilled labor costs in the US have soared significantly from March 2020 to March 2022. Labor cost growth in Canada has and remains relatively more stable. Check out just a few of job categories to compare labor cost growth in the US and Canada from data provided by CoreLogic:
Job Category US Canada
Teamster +14% +5.75%
Operating Engineer +10.5% +4%
Roofer +9% +4%
Tile Setter +9% +5%
Painter +8.1% +3.9%
Electrician +8% +4.2%
Laborer +8% +3.75%
Plumber +7.8% +5.2%
Carpenter +7% +4%
Construction Job Growth in US
US employment in construction totaled 7,628,000 in March 2022.
Employment in 3/2022 Most Growth Largest Decline
Total – 7,628,000 Idaho – +13% PA- -7%
+68,000 q/q Montana – +12% New York – -7%
+220,000 y/y Utah – +12% N. Dakota – -6%
Thanks to CoreLogic.
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