Headline inflation in Ontario back above three per cent: OCS
A recent economic report by the Ontario Construction Secretariat (OCS) revealed that in Ontario, the headline inflation surged from 2.6 per cent in June to 3.2 per cent in July.
According to the report, the inflation rate, excluding food and energy, also saw an uptick but to a lesser degree, rising from 3.2 per cent to 3.5 per cent. The cost of cement, glass, and non-metallic mineral products went up by 11.5 per cent compared to the previous year, showing a slight decrease from June’s inflation. Energy and petroleum products, as well as lumber and other wood products, continued to exhibit significant year-over-year price declines, albeit at a slower pace than before. The price index for fabricated metal and construction materials experienced a marginal dip, marking the fifth consecutive decrease in this product category.
The report revealed that in Ontario, the year-over-year headline inflation rose from 2.6 per cent in June to 3.2 per cent in July. A portion of this rise was attributed to higher food price inflation, while another part was linked to increased goods inflation, which climbed from 1.2 per cent to 2.3 per cent. Services inflation also saw an uptick, growing from 3.8 per cent to 4.0 per cent. On the other hand, energy price inflation continued its downward trend for the fifth consecutive month, dropping by 8.3 per cent year-over-year. This decline was slower compared to the 14.4 per cent decrease observed in June. Core inflation saw a slight increase, moving from 3.2 per cent to 3.5 per cent, partially due to the aforementioned higher goods inflation. Despite the rise from the previous month, inflation still remains well below its peak from the previous year.
The report revealed that energy and petroleum product prices experienced a decline of -22.2 per cent year-over-year, marking the fifth consecutive decrease within this category. However, this reduction occurred at a more gradual pace compared to the 33.3 per cent decrease observed in June. Lumber and other wood products prices saw a year-over-year decrease of 14.8 per cent, extending the streak of declines to 9 consecutive periods. This decrease was smaller than the 19.6 per cent drop recorded in May. Generally, the pace of year-over-year declines in lumber product prices has been slowing over the past several months. Fabricated metal and construction materials prices dropped by 2.1 per cent since July 2022. While a minor decrease, this marks the fifth consecutive drop in the index, following declines of -4.1 per cent in June, -1.6 per cent in May, -2.1 per cent in April, and -1.5 per cent in March.
The yearly price inflation for packaging materials and containers decelerated once more, going from 3.7 per cent in June to 3.1 per cent in July. Inflation within this category has been gradually decreasing since February and has now reached its lowest point since January 2021, at 2.3 per cent. Inflation for plastic and rubber products stood at 4.5 per cent, which was lower than the increase seen in June at 5.5 per cent, and marked the lowest figure since May 2021, when it was at 2.9 per cent.
According to the report, prices for cement, glass, and other non-metallic mineral products continue to be high, with yearly price inflation reaching 11.5 per cent. This shows a slight decrease compared to the 14.3 per cent reported for June.