Construction activity to increase in 2026 amid limited gains: Report

03-Jun-2026

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Canada’s construction sector saw modest growth in 2025 amid rising costs and easing activity pressures, according to data from Turner & Townsend.

Canada’s economy lost momentum in 2025 as softer trade conditions, labour market cooling, and heightened geopolitical risks weighed on activity. However, there is cautious optimism heading into 2026.

Annual construction GDP grew by 2.3 per cent in 2025, while construction input costs rose 2.8 per cent over the year, driven by tariff constraints, supply chain disruptions and elevated oil prices, which are also expected to remain a risk into 2026.

Bid price escalation should remain modest in the near term as subdued workloads promote healthy competition. However, 2027 and 2028 are likely to bring renewed escalation growth and increased capacity constraints as pipelines recover and backlogs fill out amid growing infrastructure demand.

Residential construction is expected to remain mixed through 2026 as elevated costs, soft pre-sales and lending constraints limit near-term momentum.

Activity should be positioned for stronger performance by 2027 as structural pressures and public-sector housing initiatives restore builder confidence.

Repair construction is expected to be stable in 2026 as households and asset owners continue to prioritize essential, lower-value maintenance. However, rising costs have paused several maintenance programs, denting sector fortunes.

With this in mind, consistent repair work on public infrastructure pieces such as highways and utilities should put a floor under near-term growth.