July 6, 2023: Headline CPI drops to 2-year low; year-over-year Lumber and Other Wood Product prices, as well as Energy and Petroleum Product prices continue to fall

July 6, 2023

Headline inflation in Ontario fell from 4.2%-3.1%, while inflation excluding food and energy decreased from 4.3%-3.9%. With regards to the industrial product and raw materials price index, prices for Cement, glass, and non-metallic mineral products continue to rise. On the other hand, prices for Energy and petroleum products and Lumber and other wood products continue to fall significantly when compared to year ago levels.

In Ontario, year-over-year headline inflation fell from 4.2% in April to 3.1% in May. Core inflation decreased by a smaller amount, from 4.3% to 3.9%. Some of this decrease can be attributed to the near record high prices experienced in May 2022, where headline and core inflation were 7.8% and 5.2% respectively. This puts headline inflation at a 2-year low; the last time annual inflation was lower was in March 2021 when it was 2.2%. Energy prices fell 13.6% year-over-year, the largest decrease since May 2020 (when energy prices fell 20.6%). Goods price inflation fell from 3.7% in April to 1.6% in May. Services prices were stickier, as inflation only changed from 4.6% to 4.5%.

Decreasing Prices

Turning to the industrial product and raw material price index, Energy and petroleum product prices declined -33.2% from a year ago. This is the third consecutive drop in this product category and the largest drop since May 2020. Prices for Lumber and other wood products decreased 35.7% annually, after already decreasing 37.4% in April; this is the 7th consecutive year-over-year drop in this category. Fabricated metal and construction materials prices also contracted slightly, by 1.8%, after contracting 2.2% year-over-year in April.

Slowing Prices 

Packaging materials and containers prices increased by 3.7%, down from the 4.5% annual increase in April. Machinery and equipment prices increased by 7.1% year-over-year compared to the 8% annual increase in April. Plastic and rubber product prices increased by 6.5% annually, a slightly slower rate then the annual increase of 7% from April.

Elevated Prices
Cement, glass, and other non-metallic mineral product prices remain elevated compared to early 2021, with a 14.1% increase from year ago levels. This is little changed from April where inflation in this category was 14.2%.

Note: some of the numbers reported in the last price index bulletin have changed due to revisions by Statistics Canada.




Ali Ahmad
Research Analyst

Ontario Construction Secretariat (OCS)
180 Attwell Drive, Suite 360, Toronto, ON M9W 6A9
P 416.620.5210 ext. 222