Non-Residential Construction Price Index1
A measure of variations in the cost of constructing non-residential projects.
- In Q1 2020, the Non-Residential Construction Price Index (NRCPI) for the Toronto Census Metropolitan Area (CMA) increased by 2.9 per cent.
- The rate of increase in the index showed sustained acceleration between 2013 and 2018, but slowed in 2019.
- The NRCPI for the Toronto CMA is expected to increase in 2020.
Measured on a year-over-year basis, the cost of non-residential building construction in the Toronto CMA as measured by the change in the NRCPI, increased by 2.9 per cent in Q1 2020.
At 2.9 per cent, the change in the index was higher than the overall average increase of 1.8 per cent for eleven selected Canadian CMAs.
This was the lowest first quarter change in the index in five years.
Further slowing in the NRCPI is expected in upcoming quarters given:
- The onset of the COVID-19 pandemic and associated slowing in the demand for many goods and services, which will result in lower prices; and
- Lower input costs associated with the decline for the average price of some construction inputs including crude oil.
In 2019, the average cost of non-residential construction in the Toronto CMA, as measured by the average change in the NRCPI increased by 3.8 per cent.
The index has registered annual increases since 2010.
Between 2013 and 2018, the annual change in the index accelerated from 0.4 per cent to 4.6 per cent respectively, but slowed in 2019 to 3.9 per cent.
Based on current Region of Peel forecasts, the index is expected to slow further to respective rates of 2.8 per cent and 2.6 per cent in 2020 and 2021.
Measured on a year-over-year basis, non-residential building construction costs in the Toronto CMA increased throughout the first three quarters of 2019, but showed sustained deceleration.
In Q3 2019, the year-over-year increase was 3.3 per cent compared with an increase of 5.3 per cent in Q3 2018.
1The Non-residential Construction Price Index measures variations in the cost of constructing non-residential projects. The approach used to developing the index “seems especially appropriate for very heterogeneous types of construction which are impossible or difficult to price”. https://www150.statcan.gc.ca/n1/en/pub/62f0014m/62f0014m1996002-eng.pdf?st=8dgsxHDf