December 20 2023: Mild Contraction in Investment; Inflation unchanged

December 20, 2023

Total ICI building construction investment was down 0.7% from September to October. This was due to a lower level of investment in the commercial and institutional sectors. Industrial sector investment continues its steady upward trend. Ontario headline inflation remained unchanged between October and November at 3.3%. Inflation excluding food and energy increased from 3.7% to 3.8%, partly driven by higher services price inflation.

Monthly Changes 
Total ICI investment in building construction decreased by 0.7% from September to October ($2.64 billion – $2.62 billion). This was primarily due to a slightly lower level of commercial building investment which decreased from $1.40 billion to $1.38 billion (-1.5%). Institutional sector investment also decreased slightly, from $615.9 million to $612.6 million (-0.5%). Industrial investment grew 0.9% ($619.4 million – $625.1 million).

Total investment in ICI building construction was up 13.2% compared to the same time last year, with the industrial sector experiencing the largest percentage change (30.6%).

Ontario year-over-year headline inflation remained at 3.3% in November. Core inflation heated up slightly from 3.7% to 3.8%, driven partly by the increase in services price inflation, which increased from 4.4% to 4.6% (movements in core inflation tend to follow services inflation since services prices are stickier). Goods inflation decreased from 1.9% to 1.8%.  Energy price inflation was -6.5%, the same as October.


Decreasing Prices 
Lumber and other wood products inflation was -11.4%, marking the 13th consecutive decrease in year-over-year prices; lumber product price inflation has been negative for over a year now. Energy and petroleum product prices declined -15.7% annually, a slightly lower deflation compared to the -16.9% from October. Fabricated metal and construction materials inflation was down 2.7%. This is the 9th consecutive drop in this category, as prices have been gradually cooling over the year. Plastic and rubber product inflation was -1.0%. This is the first negative reading in this category this year. Inflation in this product category hasn’t been this low since March 2021, when it was -2.0%.

Elevated Prices 
Cement, glass, and other non-metallic mineral product inflation remains elevated, with annual price inflation at 9.5%.

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