OTTAWA – According to the latest Royal Institution of Chartered Surveyors (RICS) Construction Monitor, construction sentiment across Canada softened in Q1 2026, showing confidence has slipped back after a modest improvement at the end of last year.
Respondents pointed to U.S. tariff policy, trade uncertainty and the wider macroeconomic impact of conflict in the Middle East as key concerns. Rising fuel and material costs, challenging credit conditions and persistent skills shortages are also driving industry instability, a release reads.
Infrastructure remains the strongest-performing area of the market, with current workloads still in positive territory at +21 per cent net balance, although this is down from +37 per cent in the previous quarter, RICS notes.
Private residential workloads, however, weakened for a fifth consecutive quarter, falling to -25 per cent, while private non-residential workloads slipped into modestly negative territory at -4 per cent.
The RICS profit margin indicator fell to -27 per cent, compared with -15 per cent in Q4. Payment delays rose, while the headcount indicator dipped into negative territory. This potentially implies firms are becoming more cautious on recruitment.
Credit conditions were also a significant factor in the overall sentiment.
The net balance for current credit conditions deteriorated to -21 per cent, from -7 per cent in Q4. Financial constraints were cited by 63 per cent of respondents, making them the second most widely reported impediment to activity, the release adds.
Respondents anticipate private residential activity to contract further over the next 12 months, with a net balance of -11 per cent.
The one ray of light is the future infrastructure.
Expectations remain positive at +41 per cent, though this is lower than the +59 per cent recorded in the previous quarter.
Skills shortages remain the most widely cited barrier and was flagged by 65 per cent of contributors, up from 59 per cent in Q4.
Shortages are most acute in skilled trades, cited by 59 per cent of respondents, while 47 per cent reported difficulties sourcing quantity surveyors.
“Despite tariff uncertainty, rising fuel costs, tightening credit and continued skills shortages, there is still some cause for optimism in Canada’s construction sector,” said Sheila Lennon, Canadian Institute of Quantity Surveyors (CIQS) CEO, in a statement. “Infrastructure continues to show resilience, particularly in energy and digital which are two areas where Canada has both the talent and expertise to deliver. CIQS remains committed to supporting and promoting the profession to ensure that construction economists remain at the table to help owners and contractors manage risk and deliver value through this period of uncertainty.”