Construction Costs & Labor: Six-Month Analysis and Forecast
Indicator Overview: Construction costs include materials (lumber, concrete, steel) and labor. After surging during the pandemic due to supply-chain disruptions and labor shortages, costs have moderated. Government data show residential construction wages continued climbing in 2025, while material prices stabilised.
Six-Month Trend: Input costs have plateaued over the past six months, though skilled labor remains scarce. Builders continue to face higher financing costs and tight labour markets, straining margins and limiting new project starts.
Six-Month Forecast: Analysts expect materials prices to remain stable or decline slightly as supply chains normalise. However, labour shortages may persist, keeping wages elevated. Overall construction costs could rise by roughly 2–4 % through mid-2026, potentially constraining new housing supply.
Note: The 6-month trends chart is included on the Real Estate Market Indicators page. Please view there for the latest chart.
