UK construction output plummets to five-year low

The UK’s construction output hit a five-year low in February as its fastest downturn since May 2020 continued.

S&P Global’s UK Construction Purchasing Managers Index dropped to 44.6 in February, down from 48.1 in January.

The latest figure indicated a steep decline in overall construction activity was propelled by a sluggish performance in residential buildings, the sector’s weakest performing area.

According to S&P, residential building decreased for the fifth month in a row, sinking to 39.3—the fastest decline since early 2009.

Respondents to the survey said weak demand, inflated borrowing costs and a lack of new work to replace completed projects drove the conditions.

S&P’s economics director, Tim Moore, said:

“Sharply declining order books rippled through the UK construction sector in February, which led to accelerated reductions in output volumes, employment and input buying.

“Weak demand conditions were attributed to entrenched caution among clients, against a backdrop of subdued consumer confidence and lackluster economic performance.”

The index’s drop in January ended the industry’s 10-month expansion streak.

Job cuts for the second consecutive month

As activity slowed, construction companies cut stuff for a second consecutive month, with the pace of job cuts at the highest levels since November 2020.

S&P suggest the lower employment figures were linked to employers not replacing leavers in a bid to patch up costs and fewer new projects.

Amidst this, sub-contractor usage also had its sharpest fall since May 2020.

Commercial construction managed to show some resilience, with only marginal declines and its index at 49.0.

Business sentiment maintained degrees of optimism with 39 per cent of survey respondents anticipating an upturn in the year ahead.

Lowering borrowing costs helped boost confidence, however subdued consumer spending and risk aversion among clients were cited as factors scaling back respondents’ optimism.

Moore added: “Construction companies remain optimistic overall about their growth prospects for the next 12 months, albeit less so than on average in 2024 amid increasing concerns about the broader UK economic outlook.

“There were also signs that rising payroll costs and purchasing prices have become a source of anxiety, with the latest increase in overall business expenses the steepest since March 2023.”

By Samuel Norman

Source: City AM

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CLARIFYING THE STATUS OF PLANNING PRACTICE GUIDANCE

On 30 January 2025, the Court of Appeal handed down its decision in Mead Realisations Ltd v Secretary of State for Housing, Communities and Local Government [2025] EWCA Civ 32. The case related to the sequential test for flood risk in the National Planning Policy Framework (NPPF) and Planning Practice Guidance (PPG), but the Court’s decision is relevant to all types of development. In the leading judgment, Sir Keith Lindblom, Senior President of Tribunals, helpfully confirmed the relationship between national planning policy in the NPPF and PPG respectively, confirming that they have equal status. As a matter of law, both are statements of national policy issued by the minister with overall responsibility for the operation of the planning system, and both are capable of being material considerations in the determination of planning applications. Whilst this decision doesn’t change the status quo as such, it is a welcome clarification of how the Secretary of State can exercise her “wide” and “flexible” discretion to formulate planning policy.

NPPF and PPG have equal status

PPG has perhaps been regarded historically as subservient to the NPPF, but this ruling confirms that equal status should be afforded to the PPG. The Court held that the PPG “complements” national planning policy in the NPPF and explains, clarifies or elucidates the policies in the NPPF to which it relates. Ideally, national planning policy and guidance should not be inconsistent, but this judgment confirms that there is no legal reason why the PPG has to be consistent with the NPPF – and therefore in theory at least, PPG could actually be used to amend the NPPF.

What does this mean for developers?

Specifically in relation to flood risk, the Court of Appeal confirmed that the PPG did not amend paragraph 162 of the NPPF in relation to “reasonably available sites” and the sequential test, but instead provides “practical guidance on the application of the policy”. Applicants and local planning authorities must therefore have careful regard to both sources of policy when considering flood risk. This places greater importance on the updated PPG on flood risk and the sequential test, which we expect to be published by the government soon.

However, this ruling is relevant to all types of development since it relates to the whole canon of national planning policy and guidance.

The Court held that the NPPF and PPG can “be used as an aid to the interpretation of each other,” so it is important that decision-makers and developers pay careful attention to both sources of policy when considering development proposals. Developers will be able to use the PPG to support their development proposals to a greater extent than they have in the past. Officers’ reports and planning committee decisions will need to take care to give equal status to the NPPF and PPG, although the weight to be afforded to individual policies will continue to be a matter of discretion for decision-makers.

However, a note of caution – PPG is updated by publication online, and generally without prior consultation, enabling the government to refine or even fundamentally alter national planning policy quickly and easily. Going forward, it will be even more important to pay close attention to updates to the PPG, given the potentially profound implications if they change the established policies or policy direction set out in the NPPF.

Although the NPPF is intended to be a “comprehensive framework” of national planning policy, the reality in light of this case is that the PPG must always be considered alongside and in addition to the NPPF. The original purpose of the NPPF in 2012 was to consolidate all policy statements, circulars and guidance documents into a single, simple document. Since then, we have seen a gradual expansion and disaggregation of policy beyond the NPPF and this decision by the Court of Appeal is perhaps an inevitable consequence of that trend. A physicist would observe that this increasing entropy means that even the planning system is subject to the second law of thermodynamics!

By Matthew White

Source: Herbert Smth Freehills

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Reducing the Nation’s Reliance on Gas Imports

The UK’s Clean Power 2030 Action Plan is projected to dramatically reduce the nation’s reliance on gas imports for power generation, according to a new analysis by energy think-tank Ember.

The plan, focused on expanding low-carbon energy sources, is expected to cut gas imports by 57%, bolstering energy security and shielding consumers from volatile global gas prices.

Ember’s analysis highlights that achieving the plan’s targets will not only decarbonize the power sector, but also create a more stable and self-sufficient energy system.

“Reducing gas reliance will be a major win for UK energy security,” says Ember’s UK analyst Frankie Mayo.

However, the report suggests that even greater savings could be achieved by extending import reduction policies beyond the power sector to include heating and transport, which constitute a significant portion of household energy expenditure.

The study underscores that reducing gas demand is the key to stabilizing consumer energy bills. The wholesale price of gas power is subject to extreme volatility due to global market conditions. In 2024, gas-powered electricity generation was on average 88% more expensive than before the energy price crisis triggered by the Ukraine war. As UK domestic gas production declines, replacing gas with low-cost wind and solar energy can insulate households and businesses from these price fluctuations Ember claims.

Furthermore, Ember warns that reliance on imported fossil fuels for heating is increasing, creating new cost risks. A gas boiler installed in 2025 will depend on imports for 78% of its fuel use, compared to 49% for a boiler installed in 2009. Conversely, electricity supply is projected to become increasingly homegrown. By 2030, heat pumps will require 83% less imported energy than gas boilers, while offering greater efficiency and potentially lower running costs.

“The UK should keep a laser focus on achieving the Clean Power 2030 Action Plan to shield itself from volatile global markets for fossil fuels,” Mayo concludes. Scaling up renewables and transitioning to technologies powered by homegrown energy sources will minimize the risk of future gas price crises, Mayo claims.

Source: Tech Digest

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REPORT: Solar Technology could more than meet UK Energy Demand

image REM tec

Solar technology could meet UK’s electricity demand fourfold without sacrificing farmland, a new report claims.

Academics from the University of Sheffield undertook research on the potential benefits of agrivoltaics, where land is used for solar energy production as well as agriculture.

They found that the coverage potential for the technology is so high that it could meet UK electricity demand more than four times over.

Regions identified for the effective deployment of agrivoltaics include Cambridgeshire, Essex, Lincolnshire, and the broader east and south-east of England.

Several factors contribute to this suitability, including the availability of flat land, the extent of existing agricultural use, grid connectivity and the prevalence of solar radiation.

Current government plans to significantly increase ground-mounted solar parks have sparked concerns about the loss of high-quality agricultural land, potential impacts on food production, and the visual impact on landscapes.

The study demonstrated how the deployment of agrivoltaics, which would see solar photovoltaic panels installed in ways to allow for farming activities underneath or between panels, could enable the simultaneous production of crops, livestock and renewable energy.

Agrivoltaics has such high coverage potential that it could meet UK government PV targets on its own, while avoiding land-use conflicts, the study found.

The university’s vice-president for research and innovation Professor Sue Hartley co-authored the study. She said: “The government and solar developers have ambitious plans for the expansion of solar farms but these risk the loss of agricultural land needed for food production at a time when global food security is threatened by geopolitical uncertainty and climate change.

 

“Agrivoltaic technology is a potential way out of this dilemma. It allows us to use the same area of land for both food and clean energy production, addressing some of the criticism levelled at solar farms.

“This technology is in regular use in many parts of the world, including areas like Scandinavia with less sunlight than the UK, but has not yet been adopted here.

“Our research identifies the areas in the UK where this technology can be most effectively deployed, both to mitigate land use conflicts and deliver the UK’s energy needs.”

 

A £1.4m project previously led by the University of Sheffield saw agrivoltaic systems installed on farmland in Tanzania and Kenya. Not only did the technology produce low carbon electricity, but it was found to significantly boost crop yields and conserve water in regions that are vulnerable to the impacts of climate change.

Researchers found that certain crops, such as maize, Swiss chard and beans, thrived under the partial shade provided by solar panels.

The shade offered further benefits as it reduced water evaporation for more efficient water use, while the panels themselves provided rainwater to supplement irrigation needs, the research found.

Source: ReNews

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A fresh look, same strong voice: CEA’s brand refresh

The CEA (Construction Equipment Association), the trade association representing the UK construction equipment industry since 1942, has unveiled a refreshed brand identity reflecting the progress and direction ahead. Recognised by the UK government as the voice of the industry, the CEA plays a vital role in supporting its members through market insights, technical expertise, networking, trade exhibitions, and lobbying efforts with both the UK and European governments. 
The refreshed brand is a natural evolution of the changes introduced over the past year. As the CEA has expanded its initiatives, strengthened its industry presence, and refined its engagement with members, it was important that its identity kept pace. The new look reflects this progress, ensuring the association presents itself in a way that is clear, professional, and aligned with the work it does.
The most striking update is the redesigned logo, which has been modernised while maintaining a strong connection to the sector. A key feature of the new design is the ‘A,’ now shaped to resemble a backhoe loader—a subtle but meaningful nod to the construction equipment industry. This, alongside a sleeker and more contemporary visual identity, ensures the CEA remains instantly recognisable while reflecting the innovation and development happening across the industry. 
The rebrand coincides with a period of transformation for the CEA, including a change in leadership. Viki Bell took on the role of Director of Operations in March 2024, bringing fresh energy and a renewed focus on the association’s role in supporting and advocating for the construction equipment industry. Under her leadership, the CEA has sharpened its strategy, enhancing member engagement, strengthening its position within government and regulatory discussions, and ensuring its initiatives align with the changing needs of the sector.
Viki Bell, Director of Operations at the CEA, commented: 
“This rebrand is an important step forward for the CEA. The construction equipment industry is moving at pace, and our role as a trade association is to ensure we are keeping up, staying relevant, and providing real value to our members. Our new identity reflects the work we’ve already been doing—modernising how we operate, improving communication, and reinforcing our position as the voice of the sector. We wanted to show evolution, not revolution, and this new identity is a clear mark of the progress we’ve made over the past year.” 
The updated brand follows a period of transformation for the CEA. Over the past year, the association has enhanced its communication channels, introduced new initiatives, and expanded engagement with industry partners. From hosting key events such as the new members forums to driving forward discussions on regulation, sustainability, and industry challenges, the CEA is more active than ever in shaping the future of the construction equipment sector. The new identity brings all these elements together, creating a strong and unified presence that supports the work being done.
The CEA’s mission is to represent the interests of its members within the UK construction equipment industry in an increasingly competitive global environment. Its vision is to be the voice of the construction equipment industry, deliver value and excellence to its members, positively influence government policy, and directly contribute to the sustainability and growth of the sector.
The association’s influence extends beyond the UK. It is represented in Brussels as an active member of the Committee for European Construction Equipment. Through its work in technical standards, regulatory affairs, and international trade, the CEA ensures that the voice of the UK construction equipment industry is heard worldwide.
The updated branding will be rolled out across all CEA platforms, including its website, events, and communications. This refresh reflects the association’s ongoing commitment to progress and delivering value to its members.
This marks an exciting step forward for the CEA, reinforcing its role in shaping the industry’s future. The association is confident that this refreshed identity will serve it well in the years ahead and looks forward to continuing to support its members and the wider sector.
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NDA Stakeholder Survey 2025 now live!

 

Have your say on the NDA

The Nuclear Decommissioning Authority is pleased to invite you to take part in our 2025 Stakeholder Survey, which is now live!

Below is a link to the survey which this year is designed to be an online questionnaire and should only take 10 minutes to complete.

 

NDA Stakeholder Survey 2025

 

The survey will be live for just four weeks, so we do encourage you to complete as soon as possible in order that your important views are incorporated in the findings. The survey will close on Thursday, 27 March at 9am.

This survey is carried out by Savanta, an independent market research company on behalf of the NDA. This research is being conducted in accordance with the Market Research Society Code of Conduct and Data Protection Act 2018.  Your answers will therefore remain strictly anonymous. Your answers will go directly to our delivery partner, Savanta, and will not be seen by the NDA.

All we ask is that as part of the online survey you signify which category of stakeholder you are a member of – i.e. Community, Industry, Regulator, NGO, Academia etc

If you have any questions about the survey and want to speak to someone at Savanta directly, please contact joshua.stoppardholden@savanta.com.

We will use your feedback to shape our future strategies, and we will be publishing a report on the findings in April.

This is your chance to have your say about how you see the NDA group’s operations and performance. We look forward to hearing your feedback.

Best wishes,
John McNamara
NDA Director of Communities and Stakeholder Engagement 

CLICK HERE TO TAKE THE SURVEY

 

 

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Power Waves for Portugal

The Porto project, Eco Wave Power’s first MW-scale wave energy venture in Portugal which is expected to be finalized during 2026, aims to harness ocean wave energy to generate sustainable electricity. Central to this initiative is the transformation of “The Gallery,” an existing breakwater tunnel, into a state-of-the-art facility housing the Company’s innovative wave energy conversion equipment. Upon completion, “The Gallery” will also feature an underwater wave energy museum and education centre, offering visitors an immersive experience into the world of renewable energy.

To prepare “The Gallery” for equipment installation and public engagement, Eco Wave Power is undertaking the following key activities:

  • Sand and Debris Removal: Clearing accumulated materials to ensure a clean and safe environment for both equipment and visitors.
  • Structural Reinforcements: Replacing doors and windows to enhance the integrity and security of the facility.
  • Waterproofing Measures: Sealing points of water ingress to maintain optimal operational conditions.

Following the completion of the infrastructure enhancements, Eco Wave Power will advance to the next phase of the project, which includes the production and deployment of its proprietary wave energy technology. The project aims to support Portugal’s renewable energy strategy, which targets 85% renewable electricity generation by 2030, while also serving as a model for global expansion.

To support the execution of the Portugal project, Eco Wave Power recently appointed Juan José Gómez as Power Station Manager. With extensive experience in renewable energy operations, Mr. Gómez will oversee the day-to-day implementation and ensure alignment with the project’s technical and operational goals. In parallel, Eco Wave Power has engaged MOQ Engineering, a renowned Portuguese engineering firm, to perform the final design and load calculations for the project. MOQ brings extensive expertise in structural and civil engineering solutions, employing advanced technologies such as Building Information Modelling (BIM) and parametric design to ensure the highest safety and efficiency standards. Their involvement strengthens the project’s foundation and aligns with Eco Wave Power’s commitment to delivering a cutting-edge and sustainable wave energy solution.

“This milestone underscores our commitment to delivering a robust and scalable wave energy solution in Portugal,” said Inna Braverman, CEO of Eco Wave Power. “By addressing critical infrastructure requirements and working with top-tier engineering experts, like MOQ, we are looking forward to a smooth installation process and setting the foundation for successful energy generation from ocean waves.”

About Eco Wave Power Global AB (publ)

Eco Wave Power is a leading onshore wave energy company revolutionizing clean energy with its patented, smart, and cost-efficient technology that converts ocean and sea waves into sustainable electricity.

Dedicated to combating climate change, Eco Wave Power operates the first grid-connected wave energy system in Israel, co-funded by EDF Renewables IL and the Israeli Energy Ministry, which recognized the technology as a “Pioneering Technology.”

Expanding globally, Eco Wave Power is preparing to install projects at the Port of Los Angeles, Taiwan, and Portugal, adding to its impressive project pipeline totaling over 404.7 MW.

The Company has received support from prestigious institutions such as the European Union Regional Development Fund, Innovate UK, and the Horizon 2020 program, and was honored with the United Nations’ Global Climate Action Award.

Eco Wave Power’s American Depositary Shares (WAVE) are traded on the Nasdaq Capital Market.

 

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Digital Tools in Modern Construction

Matt Sharp, Partner and Chief Digital Officer at RLB in the UK, considers the importance of professionalism and professional standards in modern construction.

As digital tools become integral to construction processes, ensuring technology is used responsibly, ethically, and effectively remains a top priority. In this article, I’ll examine professionalism and professional standards and explore their significance and ongoing importance for the industry’s future.

The evolution of tech in construction

Construction has traditionally been a hands-on industry, emphasising physical craftsmanship and manual labour. More recently, digital tools have started to play a much more prominent role, with the rise of digital twins, AI-powered design software, and machine learning algorithms changing how projects are envisioned and executed.

Digital transformation is accelerating as more companies realise the fantastic potential offered by AI and data driven decision making. AI’s potential to disrupt entire sectors on a phenomenal scale means that it has become essential for businesses to adapt quickly to stay competitive. This all results in an industry where the demand for skilled professionals who can understand and navigate digital tools is more significant than ever.

Yet integrating these technologies also brings new challenges — one of the most critical being the need for professionalism and clear ethical standards. As new tools are adopted, having well trained, respected professionals who can use these tools effectively and responsibly becomes essential.

A framework for digital transformation

With the sector’s digital transformation underway, it’s vital to ensure that integrating new technologies does not compromise ethical standards. For example, AI can automate tasks and enhance decision making, but it raises some important ethical questions. How can companies ensure that AI decisions align with their values? What role should human oversight play? This is where professional standards can help to provide general guidance around the ethical use of emerging technologies within construction.

In addition to working to represent BCS on the Construction Industry Council, RLB has also established an AI Council as part of its digital strategy. This council comprises professionals from various disciplines, including legal, compliance, business and IT, and it plays a vital role in ensuring that AI is used ethically. This interdisciplinary approach is essential in construction, where decisions often impact people’s lives, communities, and the built environment.

Just because AI is capable of doing something doesn’t mean it should. Professional standards in construction must evolve to ensure that AI-made decisions align with ethical principles. Professionalism and ethics must be incorporated into every aspect of the industry, from the use of AI to the way data is handled and analysed.

Upskilling the workforce

One of the most significant barriers to embracing new technologies in construction is the skills gap. Many workers in the industry need more digital expertise to effectively use AI, data analytics, and other advanced tools. As the industry increasingly integrates digital technologies, upskilling is critical to maintaining professionalism.

Businesses must take the opportunity to invest in their people to prepare for the digital future. This can be done through training programs, partnerships with educational organisations, and initiatives like the apprenticeship levy, which can be used to fund upskilling efforts. For example, RLB collaborates with Multiverse, a digital skills provider offering AI, data analysis, and digital transformation courses. This helps employees develop the necessary skills and prepares the company for future challenges.

Construction companies should focus on the technical and transformational aspects of digital skills to bridge the skills gap. It’s not just about teaching employees to code or analyse data — it’s also about developing their ability to understand how these skills can be applied within the business context. Professionals must think critically about how digital tools can drive business improvements and help companies succeed. This broader approach to digital skills will ensure that the workforce is equipped with the technical expertise and the strategic mindset necessary to navigate the complexities of modern construction.

Professionalism, certification and standards

There is a clear pathway to recognition in many professions — whether it’s through certifications, degrees, or other formalised processes. In the construction industry, professionals often gain respect through accreditation from institutions like the Royal Institute of British Architects (RIBA) or the Institution of Civil Engineers (ICE).

These certifications demonstrate a certain level of expertise and commitment to professional standards. The prevalence of digital technology in construction means a growing need for a similar professional framework for IT and digital professionals in the industry. Such a system could involve developing new certifications and standards that focus on integrating digital and physical environments in construction.

Just as civil engineers must be registered and accredited, IT professionals working on construction projects would have recognised credentials demonstrating their digital proficiency in the built environment. This could help foster tremendous respect for their role in shaping the industry’s future and ensure their expertise is held in the same regard as traditional construction professionals. One solution is to ensure that digital construction professionals are certified as Chartered IT Professionals (CITP). Becoming chartered enables an IT professional to demonstrate expert IT competence, professionalism, technical knowledge, and a significant commitment to the industry. RLB is currently encouraging all of its IT leaders to attain CITP status.

Physical and digital convergence

Digital and physical experiences are seamlessly blended across retail, education and entertainment sectors. As an example, in education, hybrid learning environments are now commonplace, with lectures being broadcast live or recorded, which requires the integration of both physical and digital infrastructures. The built environment is increasingly becoming a hybrid of physical and digital working. Integrated digital technologies enable real-time monitoring, predictive maintenance, and data-driven design. Still, they also require professionals who can bridge the gap between construction’s digital and physical aspects.

The professionalism of digital experts in construction becomes crucial in ensuring that these digital tools are applied in a way that enhances the built environment rather than creating new risks or inefficiencies. Professionals need to not only understand the technology but also be able to communicate its value to all stakeholders, including those more adept in traditional building methods. This will ensure that digital tools can enhance construction projects’ quality, safety and efficiency. At the same time, work is carried out ethically and in line with the appropriate standards and frameworks.

Professionalism in the construction industry is not just about adhering to technical standards; it’s about ensuring that the people driving digital transformation are respected as experts, their skills are continually developed, and their work is aligned with the industry’s broader values. Professionalism will be the key to ensuring that the construction industry remains forward thinking, responsible, and successful.

Source: The Chartered Institute of IT

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BSC comments on the Government’s response to the Grenfell Inquiry

British Safety Council comments on the Government’s response to the Grenfell Inquiry

 

Commenting on the Government’s response to the Grenfell Inquiry, which the Secretary of State for Housing has announced, along with the publication of a consultation on reforms to the construction products regime, Mike Robinson, Chief Executive of British Safety Council, said:

 

“It is good that the Government will enact all 58 recommendations of the Grenfell Inquiry. As the tragedy at Grenfell Tower made clear, systemic change has long been needed to keep people living in high-rise buildings safe and to ensure accountability and transparency at every touch point of the construction sector. Plans to bring regulation of the sector together under one department and a single regulator are vital to ensuring all products are safe to use, and that adequate enforcement mechanisms exist where products fall below the high standards that society, quite rightly, expects from them.

 

“But as the Government’s Green Paper recognises, a number of gaps still exist, and industry must play its part in helping to share knowledge, best practice and technical know-how to make the buildings of today and tomorrow safer for those who live and work within them.

 

“The Government’s overall approach must change attitudes, rebuild trust in institutions and keep people safe. While many of the finer details will only be developed through the process of consultation, a clear direction of travel has been established towards preventing similar tragedies.”

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What the Tariffs Mean for Canadian Construction

 

U.S. President Donald Trump has threatened a variety of tariffs on products coming into the U.S. from Canada, including steel and aluminum, which has led Canada to devise a list of counter-tariffs. (Andrew Caballero-Reynolds/AFP/Getty Images)

The cost of many construction-related products now seen as vulnerable to higher prices include everything from windows to shingles; cement; certain types of flooring; even bathroom and kitchen appliances coming from the U.S.

All are listed in the Canadian government’s proposed tariff list from early February.

Experts say threats of retaliatory tariffs are complicating the national promise to build more homes.

“With material costs now increasing, a lot of projects may just be shelved. I’ve already heard about projects for new housing being shelved just because of the uncertainty,” said Michael Brooks, CEO of the Real Property Association of Canada (Realpac).

“We’re already behind in catching up on supply. This will make it worse.”

‘We see greater uncertainty because of the tariffs’

Canadian Housing Minister Nathaniel Erskine-Smith echoed this fear last week.

“Building more homes and retaliating with tariffs are at odds with one another, because as we see greater uncertainty because of the tariffs, as we see cost increases on certain materials, prices of homebuilding are going to go up. And we need the exact opposite to happen,” Erskine-Smith said.

“I’m alive to the concern. The government is alive to the concern. The list of retaliatory measures is alive to that concern,” he said.

Brooks, who represents some of Canada’s largest landlords and developers, says there is concern and hesitation across the industry.

“It is fear of the unknown,” Brooks said.

He says you can’t plan a project without a budget, which is usually done down to “the last nut and bolt.” It’s an impossible task at the moment.

 

“We have no idea where [items being listed for tariffs] would stop, anything that is in high demand going into home construction — cement, rebar, things like that. If there are tariffs that are hitting those, it’s just going to continue to drive the costs up,” said Scott Andison, CEO of the Ontario Home Builders’ Association.

Andison says if this threat goes on for too long, builders will have to stop projects until costs become more certain.

Tariffed twice, or more

Another concern from industry is the fear of layered tariffs. Canada and the U.S. supply chains are so integrated that many supplies — including products made with steel and aluminum — will go back and forth between the two countries several times before becoming a finished product.

According to a recent RBC report, Canada imported $7.5 billion US in steel and $9.4 billion in aluminum products in 2024. Canada accounts for about a fifth of U.S. imports of steel and 50 per cent of aluminum imports.

Loomis likened construction material to the automobile industry’s cross-border workflow.

“We hear about how a part will cross the border, you know, eight times before it ends up in a finished product,” he said.

“That’s fairly similar when it comes to the structural steel industry as well. We have a lot of fabricators that do work in the United States. They will source their wide flange, or I-beam, from the United States, then fabricate it here in Canada, and then ship it back to the U.S.,”  Loomis said.

Brooks said something like an HVAC unit or an appliance might have Canadian steel, but could be assembled in the U.S. and then brought back to Canada. These are just two examples of products with the potential to skyrocket in cost.

These issues have a wider effect in a country where investors play such a key role in development.

“That loss of confidence, that last of foreseeability [is challenging],” said Brooks. “And it’s possibly going to drive investment capital elsewhere — elsewhere being outside of Canada.”

Why not just buy Canadian?

Loomis says buying Canadian isn’t always easy.

“We’ve been part of a trade regime for many years, and we all have our niche. Canada doesn’t make everything we need and the U.S is in the exact same situation,” Loomis said.

He said it would take “several years and billions of dollars” in investment to rejig manufacturing plants to build all that we need.

Brooks believes there is a lot the government could do to keep Canadian developers building, including “getting rid of interprovincial trade barriers, lowering development charges [and] removing GST on purpose-built rental.”

He argues the government can get rid of some of these added costs if it wants to calm investors during this time.

Even so, the uncertainty with what might happen between Canada and the U.S. will remain a deterrent for home builders.

“It’s really hard to have confidence with anything that comes from south of the border right now,” Brooks said.

Source: Yahoo News

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