Article source: ConstructConnect
Canada’s foreign trade picture brightened considerably in June. The nation’s merchandise trade balance recorded its biggest surplus since before the 2008-2009 recession. Furthermore, there have now been four surpluses in the past six months. During the decade prior to this year, Canada’s monthly goods trade balance spent a lot of time below the zero x-axis (Graph 1). (‘Merchandise’ trade is a fancier way of saying ‘goods’ as opposed to ‘services’ trade.)
Giving a huge helping hand to Canadian trade, at present, is the pickup in the world economy, which is giving a boost to commodities demand and prices. For the construction sector, there’s a crucial counterbalancing aspect to higher commodity prices. Commodities (or raw materials) are the crucial building blocks of all construction materials (e.g., copper in wiring; iron ore in structural and rebar steel). Therefore, rising resource prices will lift construction input costs.
But there’s another aspect to consider. Higher prices for their extraction output are an incentive for resource owners to undertake expansion expenditures, historically accounting for some of the largest construction projects anywhere.
