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The results of the Q2 2025 Royal Institution of Chartered Surveyors’ Canada Construction Monitor continue to point to a relatively cautious backdrop in the face of increased trade tariffs set by the United States. That said, the latest feedback is somewhat more stable than in the previous quarter, though the mood remains noticeably less upbeat than during most of last year.
The headline Construction Sentiment Index (CSI) posted a reading of +6 in Q2, marking a small improvement compared to the figure of -3 returned in Q1. Nevertheless, tariff induced uncertainty is still clearly evident, with the latest reading significantly more subdued than the average score of +21 seen over the previous twelve months.
Respondents noted a strong rebound across infrastructure over the latest survey period. Indeed, a net balance of +40% of contributors saw a pick-up in such workloads during Q2 – the strongest reading going back to early 2023. Within this, the ‘social’ infrastructure sub-sector recorded the most notable uplift, with water & waste, as well as transport, also seeing a marked improvement. In fact, agribusiness was the only infrastructure category in which workloads did not reportedly rise during Q2; instead, activity was largely flat according to respondents in this area.
Outside the more resilient infrastructure sector, the indicator tracking private residential activity slipped deeper into negative territory, registering a net balance of -34%. This is the weakest reading across the sector since the survey was formed in late 2019. With respect to private non-residential/ commercial development activity, the latest net balance of -6% is a little less unfavourable than -18 last time.
Twelve-month expectations across key variables tracked in the Monitor. Concentrating on forward-looking sentiment around workloads, the infrastructure sector continues to stand out as displaying the strongest growth prospects over the year ahead. Moreover, respondents upgraded their projections significantly in Q2, with the latest net balance of 56% the most upbeat since 2022.
Turning to the industry employment outlook, a net balance of +17% of contributors at the national level foresee headcounts rising over the next twelve months, up from a reading of +6% beforehand. Alongside this, respondents are now of the view that profit margins will see minimal change over the course of the next twelve month, parring back some of negativity seen in the previous iteration of the survey.
Sheila Lennon, CEO of the Canadian Institute of Quantity Surveyors, said: “Despite growing uncertainty in the residential and non-residential sectors and continued concern regarding the US tariffs, rising material costs, and continued skills shortages, infrastructure workloads saw the strongest pickup since early 2023. This infrastructure growth offers significant opportunities for quantity surveyors, as they play a critical role in forecasting costs and ensuring project efficiency to manage risk and maintain financial stability of projects. “
Comments from survey participants
Building codes and environmental code requirements have increased so drastically that even though we work in one of the most expensive housingmarkets in the world, we are still not able to build for a low enough cost to turn a profit due to increasing building costs, and slow permitting processes from the municipalities – Abbotsford
The current provincial government does not have a positive outlook on building “green” “sustainable” etc. and there is not much for incentives right now for renewables or reducing carbon – Calgary
Market uncertainty is limiting starts on private development – Calgary
Lack of understanding of economic fluctuations in high/low demand of building materials/labour concerning local, regional and global factors. Complete lack of preparation for future impacts of AI on all aspects of construction – Calgary
We are currently seeing approx 90% of projects tendered are considerably over budget in the infrastructure sector. These budgets are beingprepared by owners, designers, and engineers – all of whom are underskilled to perform this work – Chilliwack
The continual and increased threat of (unknown) tariffs are driving cost increases across the industry – Halifax
I’m afraid that sustainability doesn’t jive with affordability. In this shrinking market, virtue become less a priority. We maybe don’t like the carbon footprint of concrete although we don’t see much data about the lifecycle of such product compared to others. Carbon footprint, sustainability, biodiversity are added layers with stockholders who have different opinions about construction issues and the cost related to it – Kelowna
Imminent threat of tariffs from the USA with the new president. A shortage of skilled labour. High demand for construction resources. A high level of approvals needed from all levels of government (municipal, provincial, and federal) hinder the approval process for new projects – Kelowna
Many do not work with a matrix structure based on project and activity management – Laval
Electrical power upgrades to serve electrification projects are the issue currently. Long lead times, rising costs, etc. – Oakville
Sustainability requirements seem to be more government-driven be it on the federal or local government levels. Private developers seem to decide ona building-by-building basis based on the requirements from the stakeholders – Ottawa
Volatility caused by tarriffs from the US remains a high risk. This however has created more supply of Canadian steel in the eastern part of thecountry. Recently, we have seen very competitive steel pricing tenders – Ottawa
Tariff increases placed by USA on some of the construction materials creating uncertainty – Regina
Still unknown the cost impact of the tariffs wars – Spruce Grove tariff and steel/aluminium tax affecting tender price – Toronto
Uncertainty due to tariffs is causing owners to pause projects – Vancouver
We see a slower than usual housing market which slows construction as well. Lots of uncertainty due to the ongoing trade war with USA. Lots ofgovernment regulations drove away foreign investors and market is cooling down – Vancouver
The real estate market is currently experiencing instability, which is contributing to uncertainty in the construction industry. Fluctuations in property values and buyer demand are affecting project financing, investment decisions, and overall market confidence – Vancouver
Supply disruptions arising from trade barriers and other geopolitical factors have destabilized pricing and product and material availability – Vancouver
Cost of financing, increasing development fees, increases in construction costs and reductions in property values are negatively impacting our ability tobring projects to market – Vancouver
Reducing labour pool with the incoming workforce having different mindsets and attitudes from those retiring out of the workforce. Government-driven housing projects are ensuring a relatively stable market (prices not reducing) when reductions should be occurring which could lead to issues when theprivate market recovers could lead to reinforced affordability issues – Victoria
Changes in seismic code specific to Vancouver Island – Victoriad Cost of construction and the concern about the USA’s tariff impact on the economy are keeping investors on the sidelines until they can forecast where the market is headed – Windsor
No real factors to consider this quarter, summer is busy for all sectors in Manitoba – Winnipeg