December 6, 2022 – While looking back over 2022—building permit activity, specifically—I was amazed to see how much of a roller coaster this past year has been.

The year started on a downward trend (-8.8% from the previous month), with both residential and ICI (institutional, commercial, industrial) sectors depressed. Then, in February, both sectors shot upward 21.0%. This is followed by several ups and downs—sometimes cumulatively, sometimes segment-specific—over the course of the year.

I also track Statistics Canada’s building price indexes. Unlike building permits, this roller coaster has only been going up. In the first quarter, residential construction prices were up 5.6% from the previous quarter, while ICI was up 2.6%. Part of this growth is attributed to the rise in labour costs and fuel prices.

No surprises here… electrical product prices continued to climb during Q1 2022, with electrical safety and security systems recording historically strong quarterly price growth. The cost of plastic and rubber products hit a record-high year-over-year growth (+19.0%) in February 2022. (Prior to September 2021, double digit year-over-year growth for plastic and rubber products was last seen in 1995!)

Prices for electrical, electronic, audio-visual and telecom products also reached a year-over-year peak (+20.9%) in February 2022, which continued the upward trend observed in the previous year.

We don’t yet have figures for Q4, but Q3 continued to see rising costs, with high labour costs and fuel prices both contributing.

And, get ready for it… economists are not only suggesting that we are in for recession next year, but RBC economists believe it will arrive as early as Q1 2023.

That said, if the last few years have shown me anything, it’s that our readers are not only clever but pretty darn resilient.

So stay well during the holiday season. Best wishes, and I’ll see you in the new year.

— Anthony Capkun, acapkun@ebmag.com.

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