Vancouver Market Conditions Report - Q3 2022

We want to thank all our trade partners who have participated in our Turner Vancouver Market Conditions survey.?Your valuable input helps us understand the current market conditions for the THIRD QUARTER of 2022.?It also provides insight into what we can anticipate over the next 3 months with respect to our labour needs, material costs and market demand.?

In addition to the information provided in our Market Conditions Report, below is a summary of the data and comments we have received from our trade partners.

Labour Availability & Costs

Trade partners are continuing to experience skilled labour shortages in the Lower Mainland with 63% of the respondents finding less available workers. Many have commented on the difficulty of finding qualified employees with a shrinking pool to select from as less people are entering into the trades.?

Labour rates for 41% of the respondents have increased significantly (3% or greater) and 24% of the respondents have increased moderately (1.5% - 3%) in Q3.?Similar responses were noted in the previous Q2, suggesting strong labour pressures continue in our market.

Material Costs

Material costs for 51% of the respondents have increased significantly (3% or greater), down 36% compared to the previous Q2 with 87% responding material costs have increased significantly.?We have 23% of the respondents indicating Down Slightly and Flat material costs compared to the previous Q2 with 0% of the respondents for these two categories.??This could be a welcomed downward trend with material escalation.?However, it is still far from where we need to be to control the rapid escalation we’ve been experiencing this year.?

Workload and Backlog

Approximately 15% of trade partners, down 1% from Q2, have indicated being incredibly busy and turning away work to only focus on negotiated work.

Overall Market

We asked our trade partners to look at their typical project over the past three months as their baseline reference point; how much have costs changed, accounting for labour rates, material costs and discretionary mark-ups if they are to bid the job today.?Responses have ranged from 1.50% to 40%, but the average costs change over all subtrade categories is roughly 6.07% in the 3rd quarter of 2022.??

Approximately 22% of our trade partners feel we are in a saturated market, down 8% from Q2.?And 76% believe the overall market is steady, up 10% from Q2. ?

Additional feedback we received continues to reflect cost uncertainty as manufacturers are unwilling to commit pricing to mid/long term projects.?There are continual supply chain challenges as manufacturers struggle with production causing extended lead times on materials and equipment. ?The overall sentiment is that Vancouver will remain busy in the near term, and material and labour will continue to be impacted by inflation. ?Material such as glass will continue to climb in the next quarter, steel remains volatile, and mass timber availability is primarily dependent on the suppliers’ pipeline.?

Below are some of the comments from our trade partners:

“We anticipate impact from concrete disruption, but overall believe 2023 should be a successful year; a bit concerned beyond that period.”

“Vancouver will remain busy for the short term as large corporations move in. Smaller businesses are migrating out of the downtown core and more opportunities are presenting themselves in Surrey and Langley.”

“Some big infrastructure projects, specifically hospitals that will be tying up a lot of manpower over the next 3 years which we anticipate will further add to labour costs beyond inflation.”