Value of nonresidential construction

Non-residential construction value is projected to reach $173.1 billion in 2025, representing a decline of 1.0% from the previous year, following the 2.3% contraction experienced in 2024. This performance reflects ongoing adjustment as businesses and governments manage investment priorities amid elevated interest rates, though activity remains 16.1% below the 2014 historical peak of $206.3 billion. Monthly data through August 2025 shows investment edging higher, reaching $6.8 billion as institutional projects led gains with increases of 2.4%, followed by commercial at 1.0% and industrial at 0.3%.

Institutional construction has emerged as the strongest performer within the non-residential segment, supported by government infrastructure commitments and healthcare system capacity needs. Commercial construction showed more modest gains in the first quarter, constrained by continued weakness in office building construction as remote work trends persist and vacancy rates remain elevated in major markets. Industrial construction advanced 3.7% in the first quarter, though subsequent months have shown more mixed performance as warehouse and logistics facility development moderates from the exceptional levels of 2023-2024.

The past five years have been characterized by volatility driven first by pandemic disruptions and subsequently by the recovery trajectory across different subsectors. Non-residential construction declined 6.4% in 2020 to $159.8 billion as pandemic lockdowns halted work on numerous projects and new investment decisions were frozen amid unprecedented uncertainty. Recovery proved sluggish initially, with activity advancing just 1.9% in 2021 to $162.8 billion as supply chain disruptions, labor shortages, and lingering pandemic restrictions constrained progress.

Momentum accelerated in 2022-2023 as deferred projects moved forward and public sector infrastructure investment ramped up substantially. Construction value increased 5.4% in 2022 to $171.6 billion, then advanced another 4.2% in 2023 to reach $178.8 billion—the highest level since 2016 and marking a partial recovery from the post-oil price collapse lows. This growth was driven by multiple factors including federal "Investing in Canada" infrastructure commitments beginning to flow to projects, major institutional builds including hospitals and transit facilities breaking ground, and industrial warehouse construction responding to e-commerce logistics demand.

However, the recovery stalled in 2024 as the Bank of Canada's aggressive monetary tightening cycle weighed on investment decisions. Construction value declined 2.3% to $174.8 billion as commercial office projects were cancelled or postponed due to persistently elevated vacancy rates, while retail construction remained subdued reflecting the ongoing shift toward e-commerce. Industrial construction showed particular volatility, with 96 projects totaling 17.8 million square feet under construction in late 2024, though 77% of this space remained available for lease due to diminished demand and oversupply concerns.