Canadian construction activity will likely continue to slow down over the next few quarters, says a news JLL report.

However, if inflation continues to decelerate and debt markets stabilize, builders will gain more confidence and construction launches could rebound, beginning in the spring of 2024, says the company in its 2024 U.S. and Canadian construction trends forecast.

“Construction investment in Canada reached record levels in 2022, due primarily to booming residential and industrial sectors,” said Rob Ramsay, JLL head of project and development services in Canada, in a news release accompanying the report. “Rising interest rates have dampened activity by slowing the demand for real estate. A silver lining to a slowing economy is that softened demand normalizes inflation, helping to clear up supply-chain bottlenecks.”

Canadian material costs are expected to rise 3% to 5%, while employee wages climb 4% to 6% and total costs increase 3% to 6%.

The JLL outlook came the same day that a new Morguard report predicted the multi-residential rental market will experience a significant imbalance in 2024 as demand outpaces available supply. Morguard believes the industrial sector is poised for more growth.

JLL believes the U.S. construction market is poised for success in 2024.