May 27, 2024
SUMMARY
Investment in building construction for ICI was little changed from February but increased 6.8% year-over-year (y/y). Underlying inflation (excluding food and energy) was down from 2.8% to 2.6% from March to April. Building Construction Price Index inflation cooled slightly in Ottawa and Toronto.
INVESTMENT IN BUILDING CONSTRUCTION
Total investment for ICI remained relatively unchanged, dropping from $2.48 billion (B) in February to $2.47B in March. Commercial building investment contracted slightly, from $1.22B to $1.20B (-1.5% m/m) and was down -6% y/y; this continues a trend of slowly declining investment since August 2023. Industrial investment was up a smidge at +0.5% m/m, inching up from $610.4M to $613.4M (up +12.6% y/y). Institutional investment climbed +1.6% m/m, from $645.6M to $655.9M. However, this sector was up substantially versus last year with a +33.8% y/y change. Looking at Q1 2024 as a whole, investment changed -4.6% compared to Q4 2023 but was up +6.8% y/y (same as year-to-date change for March).
INFLATION (ONTARIO)
Headline inflation increased from 2.6% to 2.7%. However, excluding food and energy, inflation decreased from 2.8% to 2.6%. This was primarily related to lower food and services inflation, the latter of which fell from 4.1% to 3.8%. Despite the decrease, service inflation continues to remain one of the most stubborn components of the consumer price index (aside from rent and mortgage interest costs).
BUILDING CONSTRUCTION PRICE INDEX (BCPI): Q1 2024 (ICI SECTOR ONLY)
In Ottawa-Gatineau, quarter-to-quarter building inflation slowed from 0.9% to 0.3%. Institutional sector building prices had the smallest increase (0.1% q/q). All sectors saw a roughly 0.4% improvement in the y/y metrics (vs Q1 2023). Overall, there was slight improvement in both near term and yearly inflation.
In Toronto, quarterly building inflation edged up from 0.5% to 1%, with similarly accelerated inflation in all sectors. Despite the slight worsening of the short-term inflation, there was still an improvement in y/y terms, from 5.4% y/y to 4.6% y/y.
_____________________________
FOR MORE INFORMATION, CONTACT:
Ali Ahmad
Research Analyst
Ontario Construction Secretariat (OCS)
180 Attwell Drive, Suite 360, Toronto, ON M9W 6A9
P 416.620.5210 ext. 222
aahmad@iciconstruction.com
