The Canadian Construction Association (CCA) has published its Summer 2025 Construction Quarterly Economic Insights Report, highlighting key trends shaping the economy and construction industry.

In Q1 2025, Canada’s real GDP grew at an annualized rate of 2.2%, primarily fueled by international trade. Many companies stockpiled goods ahead of anticipated tariffs, temporarily boosting growth. However, this momentum reversed in April, raising concerns for the rest of the year.

The Bank of Canada held its overnight rate steady at 2.75%, signaling a cautious stance. Despite weaker labour market conditions fueling expectations for cuts, persistent core inflation remains a concern. Analysts anticipate at most one further cut—to 2.50% by year-end—particularly if retaliatory tariffs keep inflation elevated.

The construction sector continues to demonstrate resilience, with real GDP up 0.22% in Q1 and standing 1.52% above Q1 2024 levels. Growth is being driven by non-residential building projects, while a rebound in residential activity has offset rare declines in engineering construction.

The Industrial Product Price Index (IPPI) rose just 1.17% year-over-year, the slowest pace in six months. Key highlights include:

• Lumber and energy prices continued to decline between February and May.
• Ferrous metals rose 3.38%, reversing earlier declines and raising concerns about further increases.
• Cement prices climbed 0.93% month-over-month.
• The Building Construction Price Index (BCPI) saw modest growth under 1%, with New Brunswick, Alberta, and British Columbia recording the highest regional gains.

As private demand softens, non-residential projects are emerging as the construction industry’s primary growth driver. Ottawa’s record $50 billion construction package could boost sector GDP by 5%, provided funding rolls out as planned. This investment highlights the critical role of infrastructure in stabilizing the sector amid broader economic uncertainty.

Summer 2025 Construction Quarterly Economic Insights Report is available here

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