Statistics Canada
Symbol of the Government of Canada

Industrial product and raw materials price indexes

Warning View the most recent version.

Archived Content

Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please "contact us" to request a format other than those available.

The Daily


Monday, October 30, 2006
September 2006

Prices for manufactured goods at the factory gate declined in September for the second month in a row, mainly due to lower prices for petroleum products. Raw materials prices also decreased in September, as prices for crude oil continued to fall.

right click the chart to save it.

Prices charged by manufacturers, as measured by the Industrial Product Price Index (IPPI), were down 1.6% in September, following a 0.5% drop in August. Lower prices for petroleum products were the major contributors to this monthly decrease.

The 12-month change in the IPPI was up 1.3%, a lower rate of growth compared to the year-over-year increase of 3.6% in August. Upward pressure came mainly from higher prices for primary metal products.


Note to readers

The Industrial Product Price Index (IPPI) reflects the prices that producers in Canada receive as the goods leave the plant gate. It does not reflect what the consumer pays. Unlike the Consumer Price Index, the IPPI excludes indirect taxes and all the costs that occur between the time a good leaves the plant and the time the final user takes possession of it, including the transportation, wholesale, and retail costs.

Canadian producers export many goods. They often quote their prices in foreign currencies, particularly for motor vehicles, pulp, paper, and wood products. Therefore, a rise or fall in the value of the Canadian dollar against its US counterpart affects the IPPI.

The Raw Materials Price Index (RMPI) reflects the prices paid by Canadian manufacturers for key raw materials. Many of these prices are set in a world market. Unlike the IPPI, the RMPI includes goods not produced in Canada.


The Raw Materials Price Index (RMPI) was down 5.2% from August to September, following a 3.7% decline the previous month. The decrease was due primarily to lower prices for crude oil.

Compared to September 2005, raw materials cost factories 4.0% more, down significantly from the year-over-year change of 9.6% in August.

The IPPI stood at 113.4 (1997=100) in September, down from 115.2 in August. The RMPI reached 160.0 (1997=100), down from a revised level of 168.7 in August.

IPPI: Lower prices for petroleum products

On a month-over-month basis, manufacturers' prices were down 1.6%, mainly due to lower prices for petroleum products.

Petroleum and coal products prices decreased by 13.8%, as the cost for crude oil declined for a second month. This was the largest monthly decline since the 13.6% drop in April 2003. If petroleum and coal product prices had been excluded, the IPPI would have remained unchanged rather than falling 1.6%.

Prices for primary metal products fell 1.0% compared to August, the third decline in four months. Prices for copper and copper alloy products were down by 6.4%, due to lower costs for input materials. Lower prices were also observed for silver, refined gold products as well as aluminum products.

On the other hand, prices for meat, fish and dairy products (+0.9%) as well as pulp and paper products (+0.3%) were higher compared to the previous month.

right click the chart to save it.

IPPI: Primary metal products are the major contributors to the 12-month change

The IPPI was up 1.3% in September compared with the same month a year earlier, a significant change from the previous five months, where the year-over-year increases ranged between 2.2% and 4.5%. The slowdown in the increase was mainly due to the prices of petroleum products. Indeed, if petroleum and coal product prices had been excluded, the IPPI would have increased 2.9%.

Prices for primary metal products were up 28.5% compared to September 2005. Prices for nickel products (+86.0%), copper products (+77.0%), refined zinc products (+127.4%) and aluminum products (+14.9%) were all higher compared with one year earlier.

Prices were also higher than one year ago for pulp and paper products, rubber, leather and plastic fabricated products, metal fabricated products, meat, fish and dairy products, non-metallic mineral products and tobacco products.

However, prices for petroleum and coal products fell 11.3% from September 2005, the first year-over-year decrease since March 2004.

Motor vehicles and other transport equipment prices were down 3.5% from a year ago, due to the effect of a stronger Canadian dollar.

Lumber and other wood products declined 6.3% compared to September 2005, as year-over-year decreases were recorded for softwood lumber (-6.2%) and particleboard (-41.9%). Prices were also lower than a year ago for machinery and equipment.

RMPI: Crude oil prices push down the cost of raw materials

Raw materials prices fell 5.2% in September, following a 3.7% decline in August. This was the largest monthly decrease since November 2004.

Mineral fuels were the major contributor to this monthly drop, with prices declining 9.9% compared to August. Prices for crude oil were down 11.6%, mainly due to higher inventories as well as softening demand. If mineral fuels had been excluded, the RMPI would have been unchanged from August instead of falling 5.2%.

Ferrous materials prices were down 3.6%, as prices for iron and steel scrap decreased 5.7%. Prices for vegetable products declined 1.6% from the previous month, as prices for natural rubber fell 18.4% due to increased production.

On the other hand, prices for wood and animal and animal products increased 1.0% and 0.4% respectively from August to September, while prices for non-metallic minerals remained unchanged.

On a 12-month basis, the price of raw materials rose 4.0% in September, down significantly from the 9.6% year-over-year increase in August, and the lowest rate of growth since March 2006, when prices had increased 5.5% from the previous year. If mineral fuels had been excluded, the RMPI would have increased 20.3% instead of rising 4.0%.

Non-ferrous metals were the major contributors to the 12-month increase, with prices rising 71.2%, mainly the result of year-over-year price increases for zinc, radio-active concentrates, copper, lead and nickel.

Prices were also higher than one year ago for wood, vegetable products as well as non-metallic minerals.

Mineral fuels were down 8.6%, with crude oil prices falling 9.5%. This was the first negative year-over-year change since March 2004. Prices for ferrous materials were also down from a year ago.

Impact of the exchange rate

The value of the Canadian dollar against the US dollar was up 0.2% between August and September. As a result, the total IPPI excluding the effect of the exchange would have fallen 1.5% instead of its actual decrease of 1.6%.

On a 12-month basis, the value of the Canadian dollar rose 5.5% against the US dollar. If the impact of the exchange rate had been excluded, producer prices would have risen 2.8% between September 2005 and September 2006, rather than their actual increase of 1.3%.

Lower prices for intermediate goods

Prices for intermediate goods decreased 1.5% from August. Lower prices for petroleum products, primary metal products as well as chemical products were the major contributors to this monthly drop.

These decreases were partly offset by higher prices for meat, fish and dairy products, pulp and paper products and fruit, vegetable and feed products.

Producers of intermediate goods received 4.0% more for their goods in September than in September 2005. Higher prices were registered for primary metal products, pulp and paper products, rubber, leather and plastic fabricated products, metal fabricated products, non-metallic mineral products, electrical and communication products and meat, fish and dairy products.

These increases were partly offset by lower prices for petroleum products, lumber products, motor vehicles and tobacco products.

Finished goods prices decrease

Prices for finished goods were down 1.6% from August. Lower prices for petroleum products were partially offset by higher prices for lumber products, pulp and paper products, meat, fish and dairy products and chemical products.

Compared with September 2005, prices for finished goods declined by 2.6%. Lower prices were registered for petroleum products, motor vehicles, machinery and equipment and electrical and communication products.

These decreases were partly offset by higher prices for fruit, vegetable and feed products, meat, fish and dairy products, tobacco products, chemical products, furniture and fixtures, beverages, rubber, leather and plastic fabricated products as well as lumber products.

Available on CANSIM: tables 329-0038 to 329-0049 and 330-0006.

Definitions, data sources and methods: survey numbers, including related surveys, 2306 and 2318.

The September 2006 issue of Industry Price Indexes (62-011-XIE, free) will soon be available.

The Industrial product and raw material price indexes for October will be released on November 29.

For more information, or to enquire about the concepts, methods or data quality of this release, contact the Client Services Unit (613-951-9606, fax: 613-951-1539, prices-prix@statcan.gc.ca) or Danielle Gouin (613-951-3375, danielle.gouin@statcan.gc.ca), Prices Division.

Tables. Table(s).