Canadian and Design Construction writer
Canada’s construction industry returned to growth in the second quarter of 2026, driven by engineering activity and a recovery in oil and gas capital spending, but residential construction and regional investment trends remained uneven, according to the Canadian Construction Association (CCA).
Construction gross domestic product (GDP) increased by one per cent in the second quarter following two consecutive quarterly declines, bringing overall activity to approximately the level recorded a year earlier, the CCA’s fall edition of its Construction Quarterly Economic Insights report found.
Engineering and other construction activities were the largest contributors to the rebound. Oil and gas capital expenditures also recovered, increasing 7.2 per cent following a sharp pullback in the first quarter. However, spending in the sector, estimated at $11 billion, remained slightly below its level a year earlier.
Year over year, engineering construction increased 1.4 per cent, while non-residential building construction remained largely unchanged. Residential construction declined 1.8 per cent, and repair construction fell 0.8 per cent.
“Our industry remains resilient, but we are increasingly divided between emerging opportunities and near-term challenges,” said Nicole Emmett, CCA vice-president of communications, marketing and member services.
“Despite the softening of the residential market, rising construction costs and trade uncertainty, Canada’s construction industry is still building,” Emmett said.
Building construction investment increases
Canada recorded an estimated $63.3 billion in real building construction investment in the second quarter, up 1.1 per cent from the previous quarter.
Growth was driven primarily by single-family residential construction, which increased 2.9 per cent. Multi-family residential construction rose 0.7 per cent.
Regional results varied considerably, particularly in residential construction. Alberta recorded an overall decline of about 10 per cent, led by multi-family residential construction. Growth in the province’s industrial, commercial and institutional (ICI) sector was insufficient to offset the residential downturn.
The Atlantic region also experienced a decline of similar magnitude, with weakness across both residential and ICI construction.
In contrast, building construction investment increased 6.4 per cent in British Columbia and 6.9 per cent in Quebec. Manitoba recorded quarter-over-quarter growth of almost 16 per cent. In all three provinces, gains in multi-residential construction supported the increases.
Costs and project delivery remain concerns
Construction costs continued to rise during the second quarter. The Building Construction Price Index increased 3.5 per cent year over year, with steel-intensive construction divisions experiencing some of the largest increases.
Higher fuel prices, tariffs on steel and aluminum products, and additional duties on imported wood cabinets and vanities are contributing to pricing pressures throughout the construction supply chain, the report said.
The report also examines developments expected to influence the industry heading into 2027, including new federal investment incentives, domestic procurement policies, evolving trade measures, labour market conditions and a growing pipeline of major infrastructure projects.
Although labour shortages have eased considerably in the near term, workforce planning remains important as major project activity is expected to accelerate over the coming years.
“Canada has no shortage of ambition,” said Rodrigue Gilbert, CCA president.
“The challenge now is ensuring that projects move from announcements to construction. Governments and industry must continue working together to reduce barriers, support investment, and strengthen the workforce needed to deliver the projects Canadians are counting on,” Gilbert said.
A copy of the latest economic report can be found here: https://www.cca-acc.com/advocacy/economic-insights/
The next Construction Quarterly Economic Insights report will be published in January 2027.
