New CCA economic report shows construction’s steady resilience amid rising tariff pressures
The Canadian Construction Association’s (CCA) spring edition of Construction Quarterly Economic Insights is now available, offering a timely deep dive into how shifting economic conditions are impacting the construction sector.
Canada’s economy grew 0.5 per cent in Q4 2024, following modest growth of 0.3 percent in Q3 2024. These figures reflect cautious optimism, prompting the Bank of Canada to continue trimming interest rates in an effort to curb inflation. Nonetheless, continued global volatility will remain a key challenge for Canada’s macroeconomic outlook for construction as economic growth continues to be dampened.
Key takeaways
- Industry holds steady: The construction sector expanded for a second consecutive quarter in Q4 2024, with real GDP rising 1.1 percent. Despite these quarterly gains, the industry posted a slight year-over-year contraction of -0.3 per cent in 2024, driven by ongoing weakness in single-family homebuilding and repair construction.
- Material usage and trade in construction: Canada’s construction industry remains deeply dependent on imported materials, primarily steel, aluminum, cement, and electrical components. Many of these inputs are sourced primarily from the U.S., making them highly vulnerable to tariffs. The Industrial Product Price Index (IPPI) climbed 0.8 per cent. Lumber and wood products surged by seven per cent, while energy products and primary ferrous metals posted declines. The Building Construction Price Index (BCPI) ticked up slightly by just under one per cent, with Ontario, Saskatchewan, and Alberta recording the highest regional gains.
- Canada’s economic performance in Q4 2024 and early 2025: Canada’s economy demonstrated modest but steady resilience in the second half of 2024, with real GDP growing by 0.5 percent in Q4. Despite a 1.6 per cent full-year growth rate, supported by lower interest rates and a temporary export surge, early 2025 is showing signs of strain. Escalating tariff threats and political uncertainty are weighing on consumer sentiment and investment, limiting the economy’s growth potential.
What’s ahead for the industry?
The key upcoming challenge for Canada’s construction sector continues to be its deep dependence on imported materials. Economic and political unpredictability pose significant risks, including threats and tariff imposition. As the federal election approaches, the looming sentiment among Canadians is the need to adapt to the ever-shifting trade dynamics to not expose the construction sector to critical vulnerabilities such as increased material costs and destabilized cross-border supply chains. Proactive and strategic investment in trade infrastructure and global partnerships will be critical to maintaining sector stability and growth.
For more information on this report or the work CCA is currently focused on to address the issues covered, please email Louis-Philippe Champagne, Associate Vice-President, Public Affairs and Industry Practices.