October 23, 2023: Core and service inflation begin to ebb

October 23, 2023

Ontario headline inflation decreased from 3.8% in August to 3.6% in September. Inflation excluding food and energy decreased by a larger amount, from 3.6% to 3.2%. Lumber and other wood products continue to experience significant year-over-year price decreases, although at a slower rate than before. Energy and petroleum products inflation was nearly unchanged. Plastic and rubber products inflation fell below 2% for the first time since 2021.

Ontario year-over-year headline inflation decreased from 3.8% in August to 3.6% in September. This was driven largely by falling services inflation, which fell from 4.1% to 3.6%, the lowest reading this year and near the 3.4% from September 2021. Likewise, core inflation also slowed from 3.6% to 3.2% (movements in core inflation are similar to services inflation). Food and energy inflation however, increased from 4.2% to 5.2%. Energy price inflation in particular, spiked up to 4.3% annually, reversing the trend of falling year-over-year prices which occurred from March to August. Goods inflation also increased from 3.5% to 3.7%.

Decreasing Prices

Lumber and other wood products inflation was -10.7%, marking the 11th consecutive decrease in year-over-year prices. However, this drop was lower compared to prior months, as price decreases have been slowing down over the course of the year; it was almost -40% y/y in March. Fabricated metal and construction materials inflation was -1.3% annually. This is the 7thconsecutive drop in this category and similar to the -1.5% inflation from August. Energy and petroleum product prices declined 0.8% annually, much lower than the 8.1% year-over-year decrease from August, and far lower than the -33% y/y inflation in June.

Slowing Prices 
Plastic and rubber product inflation was 1.4%. Inflation in this product category hasn’t been this low since April 2021, when it was 1%.

Elevated Prices
Cement, glass, and other non-metallic mineral product inflation remains elevated, with annual price inflation at 9.7% (up from 9.5% in August).

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