Headline inflation in Ontario creeping back up: OCS

A recent economic report from the Ontario Construction Secretariat (OCS) revealed that headline inflation in Ontario experienced an uptick in August 2023.

Photo by Mike van Schoonderwalt from Pexels

A recent economic report by the Ontario Construction Secretariat (OCS) revealed that headline inflation in Ontario rose from 3.2 per cent in July to 3.8 per cent in August.

According to the report, inflation excluding food and energy also saw an increase, albeit a smaller one, as it went up from 3.5 per cent to 3.6 per cent.

Prices for cement, glass, and non-metallic mineral products experienced a year-over-year increase of 9.4 per cent, finally entering single-digit inflation territory. Energy and petroleum products, as well as Lumber and other wood products, continued to witness year-over-year price declines, although energy prices dropped at a notably slower pace compared to July.

Plastic and rubber products and packaging and materials both dipped below 3 per cent inflation, marking the first time in over 2 years. The price index for Fabricated metal and construction materials experienced a slight decrease, marking the 6th consecutive drop in this product category.

The report revealed that year-over-year, headline inflation in Ontario rose from 3.2 per cent in July to 3.8 per cent in August, bringing it back to levels observed in the first half of the year. Once again, higher food prices contributed to this increase, along with a rise in goods inflation, which went up from 2.3 per cent to 3.5 per cent. Services inflation also experienced a slight uptick, moving from 4 per cent to 4.1 per cent. Energy price inflation continued to decline for the sixth consecutive month, but this time by only 0.4 per cent annually, a notable contrast to the -8.3 per cent year-over-year change seen in July. Core inflation increased marginally, moving from 3.5 per cent to 3.6 per cent.

Photo courtesy of the Ontario Construction Secretariat

Energy and petroleum product prices decreased by 9.1 per cent annually, marking a much slower decline compared to the 22.7 per cent year-over-year decrease in July. This marked the 6th consecutive decrease in this category. Lumber and other wood product prices saw a year-over-year decline of 15.5 per cent, marking the 10th consecutive drop, which was similar to the 15.1 per cent decrease in July. Fabricated metal and construction materials prices dropped by 2.4 per cent annually. This marks the 6th consecutive drop in this category and is similar to the -3 per cent year-over-year change observed in July.

Annual price inflation for packaging materials and containers decelerated from 3.1 per cent in July to 2.9 per cent in August. Inflation within this category has been on a downward trend since February and is currently at its lowest point in over two years. Inflation for plastic and rubber products stood at 2.8 per cent, which is lower than the 4.5 per cent observed in July, marking the first time this index has fallen below 3 per cent in over two years.

Cement, glass, and other non-metallic mineral product prices continue to stay high, with an annual price inflation rate of 9.4 per cent. Nevertheless, this represents a decrease from the 11.8 per cent inflation rate observed in July and marks the first time in a year that it has dropped to single digits.

 

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