Metrolinx: Macro-economic factors driving cost escalations

Metrolinx was interested in a better understanding of the macro-economic factors driving cost escalations across its portfolio of construction projects.

Using a mix of input goods and services for a “typical” large civil construction project and/or heavy rail project, the analysis aims to:

  • Identify the recent trends (10 years) in key inputs and related factors including:
    • Material costs
    • Wage costs (by occupation/industry)
    • Equipment costs
    • Overhead & indirect costs (including margins)
    • Labour and equipment productivity
  • Understand the mean trends, and their volatility against key macro-economic factors. Emphasis to be made on the most likely reasons driving the trends.
  • Use Ontario-specific data and generate Ontario-specific results, to the extent possible.

In addition, the analysis will examined the likelihood that the most recent changes in costs during the COVID-19 pandemic are either transitory or structural.

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