ICI investment slowing down; Ontario inflation stalls: OCS

A recent economic report by the Ontario Construction Secretariat (OCS) revealed that total ICI building construction investment fell 2.8 per cent from January to February, with decreases in all sectors.

According to the report, the commercial sector had the largest decrease and has been steadily trending lower for multiple months. Ontario inflation increased slightly in March but remained below 3 per cent.

The report noted that Industrial Product Price Index showed lower inflation in energy products, fabricated metal products and construction materials, and rubber and plastic products, while lumber product prices rose for the first time in more than a year.

According to the report, total ICI investment in building construction declined month-over-month for the third month in a row in February, falling from $2.55 billion to $2.48 billion.

The report noted that the greatest decrease was in the commercial sector, which fell 4.2 per cent, from $1.27 billion to $1.22 billion.

In terms of commercial sector investment, the report revealed that it has been gradually decreasing since July 2023 and year-over-year investment was also down 6.8 per cent.

Industrial building investment changed by -2.5 per cent compared to January, but was up 14.8 per cent year-over-year. Institutional sector investment decreased half a percentage point, but was up by almost 30 per cent year-over-year, according to the report.

The report noted that overall ICI building construction investment was up 6.8 per cent compared to the same time last year, with an almost 30 per cent gain in the institutional sector. Commercial sector YTD investment, however, was down 5.2 per cent.

Ontario’s headline inflation increased slightly from 2.4 per cent year-over-year in February to 2.6 per cent year-over-year in March, which the report noted was mostly due to the change in direction of energy prices which went from -0.5 per cent to 1.4 per cent.

Inflation excluding food and energy went up from 2.7 per cent to 2.8 per cent, according to the report. This was influenced by higher services price inflation, which went from 3.8 per cent to 4.1 per cent and has been one of the most stubborn components of CPI, noted the report.