Construction Costs to Moderate in Ontario - BTY Group



    
    -   Construction cost increases in Ontario to moderate through 2011,
        resulting in more predictable housing prices for consumers
    -   Construction costs forecast to rise by 7% in 2008; 6% in 2009; 4% in
        2010; and 4% in 2011
    -   Despite challenges in manufacturing, Ontario's construction sector
        will be driven by strong population growth and the replacement of
        aging infrastructure
    -   Larger and complex construction projects will have greater cost
        escalation than smaller projects
    

    TORONTO, March 11 /CNW/ - A new report released today by BTY Group shows
that construction costs are continuing to rise in Ontario, but at a more
predictable pace. BTY Group forecasts that greater price stability in the
provincial construction market will help maintain a healthy level of
investment in both the public and private sectors of the industry.
    "Although the manufacturing sector is struggling, Ontario's construction
sector continues to be healthy thanks to strong population growth and major
capital investments throughout the province," said Joe Rekab, Managing Partner
of BTY Group. "A moderation in construction cost increases is welcome relief
from the sharp increases of the past few years, and should provide greater
stability in the construction market."
    Although construction costs continue to be at record high levels across
Canada, the escalation rates in Ontario are stabilizing, while double-digit
increases are still occurring in Alberta and Saskatchewan. BTY Group forecasts
the following escalation rates through 2011:

    
    -------------------------------------------------------------------------
              Construction Cost Escalation - Selected Provinces
    -------------------------------------------------------------------------
             B.C.      Alberta       Saskatchewan       Ontario       Quebec
    2008      7%           18%                13%            7%           4%
    2009      6%           15%                10%            6%           4%
    2010      5%           10%                 8%            4%           5%
    2011      3%            7%                 6%            4%           5%
    -------------------------------------------------------------------------
    

    According to BTY Group, construction cost escalation is affected by a
myriad of factors, including population growth, economic expansion, labour
supply, Canadian dollar value, prime lending rate, and oil prices.
    "Although construction costs in Ontario are moderating, they will
continue to outpace inflation," said Gerard McCabe, Director with cm2r inc.
"We expect some variability in the escalation of construction costs depending
on the complexity and scale of the projects, since large-scale projects
continue to face challenges in finding enough qualified contractors and
subcontractors."
    The report also forecasts regional differences in construction cost
escalation, as smaller markets with major projects, such as Sudbury and
Thunder Bay, will experience higher cost increases than Windsor and the
southwest, where costs will remain relatively flat.
    According to BTY Group, the positive outlook for the construction sector
in Ontario is being driven by:

    
    -   The replacement of aging infrastructure throughout Ontario
    -   Continued development of wind power projects and expansion of nuclear
        power production
    -   Continued population growth. Last year, Ontario grew by
        98,533 residents, and attracted almost half (48.5%) of all new
        immigrants to Canada
    -   Strong fundamentals, including Toronto's financial centre, federal
        government activity in Ottawa, and knowledge-based expertise in
        academic communities
    

    The report, Market Intelligence, is available online at: www.bty.com.

    BTY Group is one of Canada's most successful and experienced Cost
Management and Project Management consultancies providing services through
offices in Vancouver, Toronto, Edmonton and Calgary. Website: www.bty.com.





For further information:

For further information: Joe Rekab, Managing Partner, BTY Group, Tel:
(604) 734-3126; Gerard McCabe, Director, cm2r inc., Tel: (416) 925-1424

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