This report examines the short-and medium-term economic and profitability outlook for Canada’s Residential Construction Industry.
Canadian Industrial Outlook: Residential Construction—Winter 2017
Canadian Industrial Outlook: Residential Construction—Winter 2017
Industry Economic Analysis
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- Interest Rates—Interest rates remain favourable for the industry, and we do not expect the Bank of Canada to begin increasing interest rates before the spring of 2018. Even then, we expect the rise to be gradual. However, mortgage rates could be pushed up sooner, albeit at a slow pace, if longer-term bond yields were to climb further.
- Renovation Turnaround—Home renovation, an important growth segment for the residential construction industry in recent years, is now showing signs of weakness. High household indebtedness coupled with a cooling housing market will weigh on consumers’ willingness to take on large renovation projects and will also limit their access to credit.
- Employment—Employment has been concentrated in part-time jobs, which are often less secure and provide lower income. As a result, confidence in making major purchases, such as buying a home, has remained low compared to a few years ago.
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