The number of construction cranes in the Greater Toronto Area (GTA) dropped by 8.7 per cent from February to August, but its total of 230 was still five times as many as Los Angeles, which ranks second in North America in the latest Rider Levett Bucknall (RLB) biannual index.

The firm also released its construction costs report, noting double-digit increases in expenses in its two Canadian cities: Toronto and Calgary.

RLB’s index monitors fixed crane activity on construction sites in 12 major American cities, as well as Toronto and Calgary, in the first and third quarters of each year.

There was a 0.62 per cent decrease in the number of cranes in the 14 markets since the previous index.

While construction projects will continue to break ground, RLB doesn’t anticipate the number of cranes increasing heading into 2023.

RLB is a global project management, construction cost consulting, property and construction advisory services firm. It is based in the United Kingdom, but has extensive operations throughout North America, including offices in Toronto and Calgary.

GTA crane activity

The GTA has ranked first by a wide margin in every crane index since July 2015, when it had 113 cranes in the air compared to second-place New York City with 70.

Of the GTA’s 230 cranes in August: 126 were for residential buildings; 41 were for commercial buildings; 35 were for mixed-use buildings; 11 were for hospitality buildings; there were four each for education, public/civic and transportation buildings; there were two each for health-care and sports facilities; and one was for an industrial building.

The drop from 252 cranes to 230 in the GTA can be attributed in part to a decline in new condominium sales and mixed-use projects, as well as staffing challenges related to recent work stoppages by Ontario construction labourers, according to RLB.

Calgary crane activity

Calgary had 21 cranes in the air in August, which were broken down this way: 12 for residential buildings; five for commercial buildings; and two each for education and health-care buildings.

Calgary’s number of cranes decreased from 31 in February, owing to the completion of many residential and office projects in the downtown area.

RLB expects the number of cranes in Alberta’s largest city to increase again, with a variety of new developments valued at more than $7.4 billion underway.

While Calgary’s total was less than 10 per cent of the GTA, it still ranked ahead of Boston, Chicago, Honolulu, Las Vegas, New York City, Phoenix, Portland and San Francisco. 

Third-quarter construction costs report

RLB simultaneously released a report on third-quarter construction costs.

The report states the North American construction industry appears to be recovering from the impacts of COVID-19, but inflation, labour shortages and supply chain issues continue to impact costs and schedules.

Supply chain issues have limited companies’ abilities to fully benefit from the strong demand for construction services and material prices have risen sharply in the commercial construction sectors.

Inflation is impacting the cost of everything from materials to wages and, with volatile pricing predicted to continue, construction supplies including glass, concrete and lumber will remain at risk.

Labour issues continue to be a challenge and compound the supply chain issues. Severe workforce shortages are having a significant impact on construction firms of all types and sizes.

GTA construction costs

Hard construction costs on a per-square-foot basis in the GTA ranged from: $220 to $440 for office buildings; $160 to $425 for shopping centres; $230 to $715 for hotels; $570 to $895 for hospitals; $120 to $165 for industrial warehouses; $220 to $290 for multiresidential buildings; and $285 to $560 for single-family homes.

RLB reported construction costs rose 14.33 per cent from July 2021 to July 2022 in the GTA.

There was record-breaking GTA commercial real estate investment of more than $19.2 billion in the first two quarters of 2022, a 41 per cent increase over the same period in 2021, according to the report.

The first half of the year also saw record-breaking investment in residential land, followed by industrial assets, both of which are still in high demand now. 

Calgary construction costs

Hard construction costs on a per-square-foot basis in Calgary ranged from: $220 to $400 for office buildings; $140 to $295 for shopping centres; $210 to $450 for hotels; $650 to $895 for hospitals; $110 to $165 for industrial warehouses; $185 to $255 for multiresidential  buildings; and $275 to $410 for single-family homes.

RLB reported construction costs rose by 10.91 per cent from July 2021 to July 2022 in Calgary.

Building permits in Calgary exceeded $3 billion in the first half of 2022 as demand for construction continued at a record-breaking pace, according to the report. 

Applications for commercial building permits totalled $81.8 million, up from $22.6 million in the first half of 2021, with projects in the food, entertainment and hospitality sectors leading the way.

Capital expenditures in the largest sector, oil and gas, are expected to rise by 56 per cent this year.