b'PRESIDENTS MESSAGECONSTRUCTION COST ESCALATION LOOMSI sound a little like a weatherman when I forecast escalating constructionprices. Worse still, I sound like an economist. Always right. Just never right aboutthe timing. Guilty on all charges! Just for fun, however, lets look at the whys. The current political landscape is a good place to start. This is the easy part, of course. OMG. Where do I begin? Municipally, we still use pencil purchasing methodologies to procure construction, we transfer risk like it was the plague, and we tax site access, noise and all things construction as though it were our ultimate objective to drive investors out of southwestern Ontario. Queens Park is no better. Its no secret that the PCs inherited the largest subnational debt of any jurisdiction in the world (now fast approaching $400 billion), but Doug Ford is doing a very poor Mike Harris imitation. Harris shut off spending and forced users to re-rationalize priorities, and it worked. Prices remained stable. The Ford government, however, doesnt subscribe to rhyme or reason. And then there is our federal government and their counterpart south of the Mason-Dixon line, who may never extricate themselves from controversy. Trade wars, tariffs, protec-tionism, bribery and every conceivable flavour of scandal. Great stuff if youre a sitcom. Less so, if its real life.ABNORMALLY HIGH GOVERNMENT SPENDING AND ARTIFICIALLY LOW INTEREST RATES HAVE STAVED OFF RECESSION, BUT EVEN THE MOST CONSERVATIVE ECONOMISTS PREDICT THE DOWNTURN IS IMMINENT, WHICH IRONICALLY DRIVES PRICES UP NOT DOWNHow about the economy? Ever wonder what happened to the traditional seven-year economic cycle? Its called stimulus. Abnormally high government spending and arti-ficially low interest rates have staved off recession, but even the most conservative economists predict the downturn is imminent, which ironically drives prices up not down. In economic terms, prompter payment in our sector will be a good thing. Make no mistake. We could not have survived much longer as an industry without Bill 142 and all that followed. But costs will absolutely not go down. On the contrary, buyers of construc-tion will find ways to grandfather their construction project pipeline for literally decades to come and the interest expense will continue to be ours to bear. Lucky us! My personal favourite is productivity. We know from McKinsey that we need to innovate and adapt to new technologies. Actually, thats an understatement, as you know.6BUILDERSDIGESTQuarter 12019'