Q3 2024

Canadian industrial market report

Avison Young’s quarterly industrial report. We pledge to deliver comprehensive market insights to navigate in this period of limited transaction activity and uncertain market conditions.

National industrial market trends

01

Labour and productivity constraints

Macroeconomic data shows the challenges Canadian industrial sectors face. Manufacturing and construction have seen years of falling productivity, which contributed to a decline in their real gross domestic product (GDP) in 2024 compared to the previous year. Rising wages in these sectors have increased business costs, making them more vulnerable to reduced overall demand in the economy. This has led to job and production cuts. Meanwhile, the transportation and warehousing sector managed to grow its real GDP by 2% to 4% year-over-year (YoY) each month in 2024. However, productivity in this sector has stalled, and job openings are now outpacing the number of available workers.

02

Development continues towards the peripheries

During the industrial market peak in 2022, focus for industrial developers and investors began to shift to peripheral industrial areas of major markets. At that time, vacancies were historically low, land supply was short, and rent increases tapered off in core areas. While market conditions have since stabilised, developers and investors continue to be drawn to peripheral markets. These include larger tracts of available land, higher realty tax savings, and upside rental potential in locations with relatively affordable rental costs compared to other hubs in the same or neighbouring markets.

03

Primary sector strength to boost demand

Canada’s primary sector has been a strong performer in 2024, with real GDP growing faster than the overall economy since the start of the year. Key factors driving this growth include the opening of the Trans Mountain Pipeline extension in May, the restart of the Terra Nova oil field in Atlantic Canada, as well as a wave of liquefied natural gas (LNG) projects and supply agreements. Demand for uranium is increasing as nuclear energy gains traction as a sustainable solution. Potash demand has also risen sharply to address global fertilizer shortages. Additionally, Canada’s steady crop and metal production benefits from higher prices driven by sanctions, political instability, and climate-related disruptions in supply chains.

  • Principal, Director Market Intelligence, Canada
  • Research, Market Intelligence

  • Research Manager, Toronto Suburban Markets
  • Research, Market Intelligence