The non-residential building price index has broken a 40-year record, and if we believe the price of timber, which has risen 60% in three months, the worst is yet to come.
“The outcome of the war in Ukraine has not yet been taken into account, so it could be bad on the ground,” warns Eric Kotte, CEO of the General Contractors’ Association of Quebec (CEGQ).
CEGQ notes that timber prices have risen by 60% in the three months since the floods in British Columbia last fall.
“Wood, petrol and steel will explode again with last quarter’s figures,” Eric Cote said.
On the ground, these increases are felt, said Luke Brunel, site manager at Leclair Constructions on the south bank of the Montreal.
Photo by Francis Hall
Luc Brunelle, Site Manager for Leclair Construction.
“Everything has gone up, the price of fuel, it’s crazy. There is an additional charge for concrete and everything related to transportation, ”he said on Thursday.
Statistics from the Quebec General Contractors Corporation prove he is right. Prices of crude oil (+ 62%), petrol and natural gas (+ 58%) have risen in the last twelve months.
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Surprisingly, this cost increase leads to an increase in project bills.
“Once signed, we have a price. It’s a shrinking profit margin. We absorb costs,” explains Luke Brunel, and some entrepreneurs “open the contract” for an increase.
“If it costs too much to build, we have to pass a little bill. We will not work for free, ”the site manager jokes.
In public contracts, according to CEGQ’s Eric Cote, the situation is worse. “Material price adjustment clauses are rare,” he says.
At the Association de la Construction du Quebec, we are concerned. “It’s very difficult. Sometimes public contracts have to be auctioned off six months in advance,” explains its spokesman Guilloom Hull.
Marco LaSalle, director of technical services at the Quebec Construction and Home Professionals Association, says it is often difficult to obtain pre-assembled materials.
“We’ve reached the point where contractors are starting to redesign their own roof trusses. We have not seen that in Quebec since the 1970s,” he goes on to say.
We oversee the SOS Plan de Garantie Residential, which helps us better understand the rights of home and condo buyers.
“The increase in the price of our calls over the last three months is dizzying,” concludes its director Gina Baroni.
Over the past year, the difficulty of the supply chain and labor has pushed commodity prices to skyrocket. Here is why.
+ 54% increase
It is used in curtain walls, windows, doors, wires, signage, light poles and poles, HVAC pipes, roofs, sidewalls, hardware and electrical and mechanical equipment.
+ 38% increase
Refined bitumen is mainly used as a binder in roofing applications and pavement. It is used in soundproofing, ammunition, mold protection, as a binder in briquettes, in support of glass, to cover fence posts and to stabilize soil.
+ 22% increase
Copper is mainly used in power cables and plumbing, heating, ventilation and air conditioning systems in refrigeration lines and heat pumps.
+ 16% increase
Steel is an important component in the industry. Although it is mainly used in steel structures, it is also used in many mechanical components such as ventilation pipes, plumbing pipes, fire protection pipes, doors and frames, hardware and countless other components.
+ 77% increase
Cobalt is used as a binder in many hard metals. These include cemented carbides and diamond tools
+ 28% increase
Wood is used in building elements such as formwork, structural members, sawdust work, doors, rough carpentry and architectural panels.
+ 24% increase
Nickel combines with other metals to form alloys whose properties include both dilution and high thermal strength. It is used to make stainless steel and steel alloys.
+ 177% increase
In construction, propane is used for temporary heating and as a fuel for construction machinery.
+ 84% increase
Tin is used in steel boxes and in alloys and solders with copper for wiring.
Source: Trade Economy and the General Contractors Corporation of Quebec
According to the Corporation of Quebec’s General Contractors, there are major price increases in construction and civil products that will inevitably have an impact on the cost of construction projects.