Metrolinx: Macro-economic factors driving cost escalations

The challenge

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

Key results