April 25 2024: Investment slowing down; Ontario inflation stalls

April 25, 2024

Total ICI building construction investment fell 2.8% from January to February, with decreases in all sectors. The commercial sector had the largest decrease and has been steadily trending lower for several months. Ontario inflation increased slightly in March but remained below 3%. The Industrial Product Price Index showed lower inflation in energy products, fabricated metal products and construction materials, and rubber and plastic products, while lumber product prices rose for the first time in a over a year.

Total ICI investment in building construction declined month-over-month (m/m) for the third month in a row in February (-2.8%), falling from $2.55 billion to $2.48 billion. The greatest decrease was in the commercial sector, which fell 4.2%, from $1.27 billion to $1.22 billion. Commercial sector investment has been gradually decreasing since July 2023 and year-over-year (y/y) investment was also down 6.8%. Industrial building investment changed by -2.5% compared to January ($625.7 million to $610.4 million), but was up 14.8% y/y. Institutional sector investment decreased half a percentage point ($648.6 million to $645.6 million), but was up by almost 30% y/y.

Overall ICI building construction investment was up 6.8% compared to the same time last year, with an almost 30% gain in the institutional sector. Commercial sector YTD investment, however, was down 5.2%.

Ontario’s headline inflation increased slightly from 2.4% y/y in February to 2.6% y/y in March, mostly due to the change in direction of energy prices which went from -0.5% to 1.4%. Inflation excluding food and energy went up from 2.7% to 2.8%. This was influenced by higher services price inflation, which went from 3.8% to 4.1% and has been one of the most stubborn components of CPI (along with groceries and housing costs).

Note: Inflation excluding food and energy, or “core” inflation is often of interest since food and energy prices tend to be volatile and may not represent average underlying prices trends.

Decreasing Prices

Energy and petroleum product prices fell for the 13th month in a row in March, at -2.3% y/y (-6.6% in February). Fabricated metal products and construction materials inflation was -0.4% y/y (-2.5% in February) marking the 13th straight month of marginally lower y/y prices. Plastic and rubber products inflation dropped to -2.6% y/y (-0.5% in February).

Slowing Prices
Packaging material and containers inflation fell from 1.6% y/y to 0.9% y/y.

Elevated Prices
Lumber and other wood products prices were up 3.6% y/y after a year of negative inflation. Cement, glass, and other non-metallic mineral products inflation was 7.9% y/y, similar to the 8.1% y/y from February.



Ali Ahmad
Research Analyst

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