b'CONSTRUCTION MARKETCONSTRUCTION PROJECTSON HOLDFACTORS CONTRIBUTING TO CONSTRUCTION BUYERS DELAYING PROJECTS By Warren HeeleyRISING INTEREST RATES, materialcontinually increasing material prices,Savings by waiting for interest rates prices and uncertainty about thesupply chain issues and uncertainty ofand prices to decrease is simply not future are causing the viability of newproject profitability has constructionrealistic. There are too many factors projects to be questioned by buyers ofbuyers rethinking the viability involved in changes to interest rates and construction. As a result, many buyersof projects. construction prices and no quick fix to are not selecting bid winners after thethese challenges, notes Mollenhauer. tender process or they are simply puttingMollenhauer says one reason constructionIf anything, bid pricing will continue to projects on hold. The rise in projects notbuyers are not going ahead with projects increase as trades and suppliers try to moving forward is of great concern to theis their belief in savings by waiting. hedge their bets on the uncertainty in Ontario construction industry. When tender bids are received with the market.In 2022, we saw a higher numberpricing well above the buyers estimatedDELAYED PROJECTSof projects put on hold than anythingproject budget and they look at theA key reason for projects being delayed I have seen in decades, says Johnvolatility in the current market, the buyeris the cost of money. A year and a half Mollenhauer, president and CEO of theoptimistically puts the project on holdago, interest rates were a smaller factor Toronto Construction Association (TCA).waiting for pricing and interest rates in the borrowing cost for construction Concern about rising interest rates,to stabilize. loans. Over the last year, this is no longer 34Quarter 12023 BUILDERSDIGEST'