Open side-bar Menu
 The AEC Lens
Alex Carrick, Chief Economist at ConstructConnect
Alex Carrick, Chief Economist at ConstructConnect
Alex Carrick is Chief Economist for ConstructConnect. He is a frequent contributor to the Daily Commercial News and the Journal of Commerce. He has delivered presentations throughout North America on the Canadian, United States and world construction outlooks. A trusted and often-quoted source for … More »

Canada’s Construction Material Costs Tell Diverse Stories (Part 2 of 2)

 
January 29th, 2016 by Alex Carrick, Chief Economist at ConstructConnect

Article source: CMDGroup

Following up on the subject of Canadian construction material costs, this Economy at a Glance concentrates on seven graphs.

Graph 1: Softwood lumber prices in Canada rose rapidly throughout 2012, but over the past three years, they have stayed mainly flat. The U.S.-Canada softwood lumber agreement (SLA), after being in effect for nine years, was allowed to expire in October of last year.

Participants in Canada wanted to see continuation of the SLA under the same terms as originally negotiated. The U.S. industry has been wishing for a re-calibration of provisions.

Under the SLA, quotas and/or export taxes were to be imposed on Canadian producers when prices fell below a benchmark range.  Individual provinces were allowed to choose their own form of regulation. Additional disputes were argued on several occasions before the London Court of International Arbitration (LCIA).

Without the SLA, as shown by the long history of contentious wrangling prior to its 2006 implementation, there is considerable potential for legal action that will disrupt North American lumber markets.

Graph 2: Waferboard and particle board prices are currently below their starting point in the chart, January 2010. The cost of these products can be kept so low because there are multiple sources of the wood shavings and chips that are compacted and compressed into sheets.

Lower-quality woods will serve the purpose as well as more expensive hardwoods and evergreens.

Graph 3: The ready-mix concrete curve for Canada, just as in the U.S., has marched consistently and steadily upwards, for the most part, over the period from 2011 to the present.

Graph 4: Asphalt prices during the past six years have been notably volatile, with many peaks rapidly turning into numerous troughs. Along with world oil prices, they are currently in a down cycle (-31.8% y/y).

Graph 5: Diesel fuel, used to run machinery and trucks, and to provide portable heating at exposed-to-the-weather construction sites in winter, has also lately experienced a slide back to near its 2010 kick-off point.

On a year-over-year basis, its drop (-22.5%) has been even steeper than for regular gasoline (-15.2%).

Graph 6: Since mid-2011, the cost of gypsum for wallboard in Canada has steadily risen, with a few month-to-month exceptions. Northern Nova Scotia, including Cape Breton, is the most productive gypsum mining region in the land of Mounties and maple syrup.

The U.S., Spain and Mexico are other nations with large open-pit gypsum-mining operations.

Among U.S. states, Oklahoma, Iowa, New Mexico, Nevada, Texas and California are particularly rich in the non-metallic mineral. (That’s in case you’re wondering about Iowa’s other claims to fame besides opening the U.S. presidential-election caucus and primary seasons.)

Graph 7: The precipitous and shocking tailspin in the price of iron ore (-25.5% y/y) has two implications for construction. First, it should serve to beat down the price of steel.

Just as significant, however, it removes the incentive to proceed with large-scale iron ore mining investments, which at one time, were being counted on to provide positive jolts for the economies of some regions in Canada, particularly in northern Quebec.

Before signing off on this latest EAAG, there are some other year-over-year Canadian construction material price movements that deserve mention: glass and glass products (+8.1%); plastic pipe fittings (+11.4%); and most dramatic of all, prefabricated metal buildings (+17.2%).

Canada Industrial Product Price Index (IPPI) and
Raw Materials Price Index (RMPI) Results
% Change in the November 2015 Index from:
3 YEARS 1 YEAR 6 MONTHS 3 MONTHS 1 MONTH
AGO AGO AGO AGO  AGO
Type of Construction Indices:
Residential 9.4% 2.2% 1.6% 0.1% 0.1%
Non-residential Building 9.3% 3.6% 2.2% 0.2% 0.0%
Engineering/Civil 2.4% -3.2% 0.8% -0.9% -1.0%
Total Construction 6.6% 0.3% 1.4% -0.3% -0.4%
Key Aggregates:
Lumber and other wood products 3.2% 1.0% 1.4% -0.2% 0.3%
Primary ferrous metal products 4.8% -3.6% -0.5% -1.0% 0.3%
Primary non-ferrous metal products -10.6% -1.9% -6.0% -2.9% -3.5%
Fabricated metal products and construction materials 7.8% 3.3% 1.1% 0.2% 0.2%
Machinery and equipment (includes HVAC) 6.1% 3.4% 1.6% 0.3% 0.2%
Electrical, electronic and telecommunications 9.7% 6.0% 3.3% 0.4% 0.5%
Cement, glass, other non-metallic minerals 6.1% 0.8% 0.7% 0.4% -0.1%
Petroleum and coal products -22.1% -19.8% -9.2% -5.4% -0.4%
Chemicals and chemical products -0.4% -2.4% 0.2% -0.9% -0.3%
Construction Inputs: 
Softwood lumber (spruce-pine-fir) 15.0% -4.2% 5.5% -4.5% 0.9%
Veneer and plywood 10.4% -4.4% 1.6% -2.8% 0.3%
Waferboard and particle board -23.4% -1.3% 3.0% 1.6% 0.0%
Shakes and shingles and wood siding 18.1% 2.3% -0.8% -0.2% 0.0%
Wood windows and doors 3.3% 3.5% 0.1% 0.0% 0.0%
Glass and glass products (except automotive) 16.4% 8.1% 3.5% -0.6% 0.0%
Ready-mix concrete 4.4% -0.5% 1.0% 0.6% -0.2%
Clay products (brick) 4.8% -0.7% 0.3% 0.0% 0.0%
Fabricated structural metal 14.7% 8.0% 3.7% 0.2% 0.0%
Prefabricated metal buildings 40.9% 17.2% 8.7% 1.3% 1.6%
Metal windows and doors 2.7% 1.0% 0.0% 0.0% 0.0%
Metal roofing 3.2% -0.1% -0.6% -0.6% 0.0%
Bolts, nuts, screws, washers, fasteners 6.1% 5.9% 0.1% 0.2% 0.0%
Hardware 18.4% 7.2% 4.0% 0.3% 0.6%
Plastic pipe fittings 23.0% 11.4% 0.0% 0.0% 0.0%
Plastic plumbing fixtures 13.1% 3.4% 1.4% 0.2% 0.3%
Electric lamps, lighting fixtures -2.6% -2.1% 0.0% 0.0% 0.0%
Concrete pipes and fittings -2.6% -1.9% -0.6% -0.7% 0.0%
Asphalt -25.9% -31.8% -6.6% -19.6% -13.3%
Gasoline (regular) -19.7% -15.2% -10.6% -10.7% -1.6%
Diesel fuel -21.3% -22.5% -5.3% 6.1% 1.9%
Natural gas 0.4% -13.4% 1.6% -2.7% -3.4%
Gypsum 66.1% 15.9% 6.3% 1.5% -0.1%
Iron ore -48.0% -25.5% -14.5% -15.3% -9.9%
Stone 7.1% 0.2% 0.6% 0.0% 0.0%
Data source: Statistics Canada (Cansim Tables 329-0075, 329-0076 and 330-0008).
Chart: CMD – CanaData.
Graph 1: Softwood Lumber Price Index – Canada
Softwood Lumber Price Index - Canada
The last data point is November 2015.
Data sources: Statistics Canada (Industrial Product Price Index and Raw Materials Price Index series − IPPI & RMPI)
(Cansim Tables 329-0075, 329-0076 and 330-0008)
Chart: CMD.
Graph 2: Waferboard and Particle Board Price Index – Canada
Waferboard and Particle Board Price Index - Canada
The last data point is November 2015.
Data sources: Statistics Canada (Industrial Product Price Index and Raw Materials Price Index series − IPPI & RMPI)
(Cansim Tables 329-0075, 329-0076 and 330-0008)
Chart: CMD.
Graph 3: Ready-mix Concrete Price Index – Canada
Ready-mix Concrete Price Index - Canada
The last data point is November 2015.
Data sources: Statistics Canada (Industrial Product Price Index and Raw Materials Price Index series − IPPI & RMPI)
(Cansim Tables 329-0075, 329-0076 and 330-0008)
Chart: CMD.
Graph 4: Asphalt Price Index – Canada
Asphalt Price Index - Canada
The last data point is November 2015.
Data sources: Statistics Canada (Industrial Product Price Index and Raw Materials Price Index series − IPPI & RMPI)
(Cansim Tables 329-0075, 329-0076 and 330-0008)
Chart: CMD.
Graph 5: Diesel Fuel Price Index – Canada
Diesel Fuel Price Index - Canada
The last data point is November 2015.
Data sources: Statistics Canada (Industrial Product Price Index and Raw Materials Price Index series − IPPI & RMPI)
(Cansim Tables 329-0075, 329-0076 and 330-0008)
Chart: CMD.
Graph 6: Gypsum Price Index – Canada
Gypsum Price Index - Canada
The last data point is November 2015.
Data sources: Statistics Canada (Industrial Product Price Index and Raw Materials Price Index series − IPPI & RMPI)
(Cansim Tables 329-0075, 329-0076 and 330-0008)
Chart: CMD.
Graph 7: Iron Ore Price Index – Canada
Iron Ore Price Index - Canada
The last data point is November 2015.
Data sources: Statistics Canada (Industrial Product Price Index and Raw Materials Price Index series − IPPI & RMPI)
(Cansim Tables 329-0075, 329-0076 and 330-0008)
Chart: CMD

Related posts:

Tags: , , , , , , ,

Category: CMD Group

Leave a Reply

GRAPHISOFT: ARCHICAD download 30-day FREE trial
Canon: CW910
CADalog.com - Countless CAD add-ons, plug-ins and more.



Internet Business Systems © 2016 Internet Business Systems, Inc.
595 Millich Dr., Suite 216, Campbell, CA 95008
+1 (408)-337-6870 — Contact Us, or visit our other sites:
TechJobsCafe - Technical Jobs and Resumes EDACafe - Electronic Design Automation GISCafe - Geographical Information Services  MCADCafe - Mechanical Design and Engineering ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy Policy