Industrial product and raw materials price indexes, August 2016
View the most recent version.
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 Industrial Product Price Index (IPPI) declined 0.5% in August, after increasing 0.2% in July. Of the 21 major commodity groups, 2 were up, 11 were down and 8 were unchanged.
Industrial Product Price Index, monthly change
The decline in the IPPI in August was mainly attributable to prices for meat, fish, and dairy products (-2.3%), which posted their largest decrease since October 2007. The main reason for the lower prices in this commodity group was fresh and frozen pork (-5.8%) and, to a lesser extent, fresh and frozen beef and veal (-2.8%). The price of fresh and frozen beef and veal began a downward trend in September 2015, recording a 17.9% year-over-year decline in August 2016. This decrease coincided with a 25.5% year-over-year drop in the price of cattle and calves in August. Prices for fresh and frozen pork have fallen 0.3% since August 2015; however, they were down 8.6% over the past two months (July and August 2016).
Energy and petroleum products (-1.3%) also exerted downward pressure on the IPPI, as prices for heavy fuel oils (-4.9%), light fuel oils (-1.6%), diesel fuel (-1.6%) and motor gasoline (-0.5%) fell in August. The IPPI excluding energy and petroleum products declined 0.3%.
Prices for motorized and recreational vehicles fell 0.3% in August, mainly because of lower prices for passenger cars and light trucks (-0.3%), motor vehicle engines and motor vehicle parts (-0.2%), and aircraft (-0.4%). Lower prices for motorized and recreational vehicles were closely linked to the appreciation of the Canadian dollar relative to the US dollar.
Also contributing to the decline in the IPPI in August were lower prices for fruit, vegetables, feed and other food products (-0.4%), specifically other animal feed (-3.4%). Lower prices for grain and oilseed products (not elsewhere classified) (-0.6%), specifically oilseed cake and meal (-5.1%), also contributed to the decline, but to a much lesser extent.
Some IPPI prices are reported in US dollars and are converted to Canadian dollars using the average monthly exchange rate. Consequently, any change in the value of the Canadian dollar relative to the US dollar will affect the level of the index. From July to August, the Canadian dollar appreciated 0.4% relative to the US dollar. If the exchange rate had remained constant, the IPPI would have declined 0.4% instead of falling 0.5%.
Industrial Product Price Index, 12-month change
The IPPI declined 1.3% over the 12-month period ending in August, after falling 1.3% in July.
The year-over-year decrease in the IPPI was largely attributable to lower prices for energy and petroleum products (-9.8%). Motor gasoline (-12.4%), diesel fuel (-5.4%) and heavy fuel oils (-13.3%) were the main reasons for the decline in this commodity group. The IPPI excluding energy and petroleum products fell 0.1%.
Also contributing to the decline were lower prices for meat, fish, and dairy products (-3.8%) and chemicals and chemical products (-3.8%). Prices for fresh and frozen beef and veal (-17.9%) were the main reason for the decrease in meat, fish, and dairy products, while ammonia and chemical fertilizers (-21.3%), petrochemicals (-6.6%), and plastic resins (-7.0%) led the fall in chemicals and chemical products.
Moderating the year-over-year decline in the IPPI were higher prices for primary non-ferrous metal products (+6.0%). The main reason for the increase was unwrought precious metals and precious metal alloys (+18.3%), while lower prices for unwrought copper and copper alloys (-7.5%), and basic and semi-finished products of aluminum and aluminum alloys (-8.7%) moderated the gain.
Raw Materials Price Index, monthly change
The Raw Materials Price Index (RMPI) fell 0.7% in August, after declining 2.7% in July. Of the six major commodity groups, one was up, and five were down.
The decline in the RMPI was led by lower prices for animals and animal products (-3.7%), specifically hogs (-14.4%) and, to a much lesser extent, cattle and calves (-1.6%). This was the largest decrease in the price of hogs since November 2015, when prices fell 15.2%. According to the July 2016 livestock estimates, the number of hogs in Canada was up 1.9% from July 1, 2015. Higher inventories, combined with lower feed costs, put downward pressure on the price of hogs.
Also contributing to the decline in August were lower prices for crop products (-2.9%), specifically oilseeds (except canola and soybeans) (-9.2%) and grains (except wheat) (-4.6%). The decrease in grains was widespread, as prices for other grains, not elsewhere classified (-10.0%), oats (-5.9%), barley (-2.9%) and grain corn (-1.2%) fell in August.
Moderating the decline in the RMPI were higher prices for crude energy products (+1.4%), specifically conventional crude oil (+1.2%). The RMPI excluding crude energy products decreased 1.9% in August.
Raw Materials Price Index, 12-month change
The RMPI posted its first year-over-year gain since July 2014, increasing 0.6% in August.
Higher prices for crude energy products (+5.1%), specifically conventional crude oil (+5.7%), were the largest contributor to the increase in the RMPI in August. The RMPI excluding crude energy products declined 2.2%.
The increase in the RMPI in August was also the result of higher prices for metal ores, concentrates and scrap (+5.5%).
Largely moderating the year-over-year gain in August were lower prices for animals and animal products (-10.3%), mainly cattle and calves (-25.5%) and hogs (-15.4%).
Crop products (-3.0%) declined as well in August, as prices for other crop products (-2.8%), wheat (-9.6%) and canola (including rapeseed) (-8.3%) decreased compared with the same month last year.
Note to readers
With each release, data for the previous six months may have been revised. The indexes are not seasonally adjusted.
The Industrial Product Price Index 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 transportation, wholesale and retail costs.
Canadian producers export many goods. They often indicate their prices in foreign currencies, especially in US dollars, which are then converted into Canadian dollars. In particular, this is the case 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. However, the conversion into Canadian dollars only reflects how respondents provide their prices. This is not a measure that takes the full effect of exchange rates into account.
The conversion of prices received in US dollars is based on the average monthly exchange rate (noon spot rate) established by the Bank of Canada and available in CANSIM table 176-0064 (series v37426). Monthly and annual variations in the exchange rate, as described in the release, are calculated according to the indirect quotation of the exchange rate (for example, CAN$1 = US$X).
The Raw Materials Price Index reflects the prices paid by Canadian manufacturers for key raw materials. Many of those prices are set on the world market. However, as few prices are denominated in foreign currencies, their conversion into Canadian dollars has only a minor effect on the calculation of the RMPI.
Infographic: Producer Price Indexes at a Glance
The infographic, "Producer Price Indexes at a Glance," which is part of Statistics Canada — Infographics (), is available. This infographic demonstrates how producer price indexes for goods and services are calculated and why they are important for the Canadian economy. 11-627-M
Real-time CANSIM tables
The industrial product and raw materials price indexes for September will be released on October 31.
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).
- Date modified: