ICI Investment Steady; Inflation Cools Modestly: OCS

According to the Ontario Construction Secretariat (OCS), underlying inflation was down from 2.8 per cent to 2.6 per cent from March to April.

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A recent economic report by the Ontario Construction Secretariat (OCS) revealed that investment in building construction for ICI was little changed from February but increased 6.8 per cent year-over-year.

According to the report, underlying inflation (excluding food and energy) was down from 2.8 per cent to 2.6 per cent from March to April. The report noted that Building Construction Price Index inflation cooled slightly in Ottawa and Toronto.

Total investment for ICI remained relatively unchanged, dropping from $2.48 billion in February to $2.47 billion in March, according to the report.

The report noted that commercial building investment contracted slightly, from $1.22 billion to $1.20 billion and was down -6 per cent year-over-year. According to the report, this continues a trend of slowly declining investment since August 2023.

In terms of industrial investment, the report noted that it was up slightly at +0.5 per cent month-over-month, moving upwards up from $610.4 million to $613.4 million.

Institutional investment rose +1.6 per cent month-over-month, from $645.6 million to $655.9 million, according to the report.

The report noted, however, that this sector was up substantially versus last year with a +33.8 per cent year-over-year change. Looking at Q1 2024 as a whole, investment changed -4.6 per cent compared to Q4 2023 but was up +6.8 per cent year-over-year.

 

Headline inflation increased from 2.6 per cent to 2.7 per cent. The report noted, however, that excluding food and energy, inflation decreased from 2.8 per cent to 2.6 per cent, which was primarily related to lower food and services inflation, the latter of which fell from 4.1 per cent to 3.8 per cent.

Despite the decrease, the report noted that service inflation continues to remain one of the most “stubborn” components of the consumer price index (aside from rent and mortgage interest costs).


In Ottawa-Gatineau, quarter-to-quarter building inflation slowed from 0.9 per cent to 0.3 per cent, according to the report.

Institutional sector building prices had the smallest increase (0.1 per cent quarter-over-quarter). All sectors saw a roughly 0.4 per cent improvement in the year-over-year metrics.

Overall, there was slight improvement in both near term and yearly inflation, according to the report.

In Toronto, quarterly building inflation edged up from 0.5 per cent to 1 per cent, with similarly accelerated inflation in all sectors. Despite the slight worsening of the short-term inflation, there was still an improvement in year-over-year terms, from 5.4 per cent year-over-year to 4.6 per cent year-over-year.

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