ICI investment off to a cool start in 2024: OCS

According to the Ontario Construction Secretariat (OCS), total ICI building construction investment decreased from December to January.

A recent economic report by the Ontario Construction Secretariat (OCS) revealed that total ICI building construction investment dropped 1.8 per cent from December to January, mainly due to a -2.7 per cent monthly change in the commercial sector.

According to the report, industrial and institutional sector investment also saw small declines but were up in comparison to January 2023. The report noted that both headline and core CPI dropped below 3 per cent in Ontario.

The Industrial Product Price Index showed inflation declines in energy products, lumber products, fabricated metal products and construction materials, while rubber and plastic products inflation was flat, according to the report.

Total ICI investment in building construction declined month-over-month for the second month in a row in January, falling from $2.62 billion to $2.57 billion, the report noted.

According to the report, this was due to a 2.7 per cent drop in the commercial sector. The report noted that commercial sector investment has been gradually decreasing since July 2023 and was also down 2.6 per cent versus January 2023.

Industrial building investment was down 1.9 per cent compared to December, but still up 17.5 per cent year-over-year. The report noted that institutional sector investment was stable with only a 0.2 per cent month-over-month decrease, and was up 28.4 per cent year-over-year.

Ontario’s headline inflation dropped from 2.7 per cent year-over-year in January to 2.4 per cent year-over-year in February, according to the report.

The report noted that inflation with the exclusion of food and energy dropped from 3.2 per cent to 2.7 per cent.

This is the first time in more than two years that this measure of core inflation has dropped below 3 per cent, according to the report, which was mainly due to lower goods inflation, which dropped from 1.4 per cent to 0.9 per cent. Services price inflation remained at 3.8 per cent.

The report noted that energy and petroleum product prices fell on a year-over-year basis for the 12th straight month in February, with inflation at -6.3 per cent.

Lumber and other wood products prices were down 2.6 per cent year-over-year and while year-over-year inflation has been down for more than a year, recent decreases have been much smaller than a year ago when it was almost -40 per cent year-over-year, according to the report.

Fabricated metal products and construction materials were down rounding out a 12-month streak of similar sized drops in annual inflation, the report noted. Packaging material and containers inflation fell from 1.3 year-over-year to -0.2 per cent year-over-year.

Plastic and rubber products inflation was flat, a drop compared to the 1.8 per cent year-over-year from January. Cement, glass, and other non-metallic mineral products inflation rose to 6.4 per cent year-over-year, a slight increase from 5.8 per cent in January.

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