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Industrial product and raw materials price indexes, January 2018

Released: 2018-02-28

Prices for products sold by Canadian manufacturers, as measured by the Industrial Product Price Index (IPPI), rose 0.3% in January, mainly due to higher prices for energy and petroleum products. Prices for raw materials purchased by Canadian manufacturers, as measured by the Raw Materials Price Index (RMPI), increased 3.3%, primarily as a result of higher prices for crude energy products.

Chart 1  Chart 1: Prices for industrial goods increase
Prices for industrial goods increase

Industrial Product Price Index, monthly change

The IPPI rose 0.3% in January, after edging down 0.1% the previous month. Of the 21 major commodity groups, 7 were up, 10 were down and 4 were unchanged.

Prices for energy and petroleum products (+3.4%) were largely responsible for the increase in the IPPI in January. The increase in this product group was mainly due to higher prices for motor gasoline (+3.8%), diesel fuel (+4.6%) and light fuel oils (+3.8%). The IPPI excluding energy and petroleum products edged down 0.1%.

Primary non-ferrous metal products (+1.0%) and meat, fish and dairy products (+0.9%) also contributed to the increase in the IPPI in January, but to a lesser extent.

Higher prices for unwrought precious metals and precious metal alloys (+2.8%) were mainly responsible for the increase in primary non-ferrous metal products. Unwrought aluminum and aluminum alloys (+1.2%) and unwrought copper and copper alloys (+1.2%) also exerted upward pressure on this product group.

The increase in meat, fish and dairy products was mainly due to higher prices for fresh and frozen beef and veal (+3.2%). Prices for fresh and frozen pork (+0.8%) and fresh and frozen poultry of all types (+0.9%) also rose in January.

The increase in the IPPI was primarily moderated by lower prices for motorized and recreational vehicles (-0.9%). The decline in this product group was mainly attributable to lower prices for motor vehicle engines and motor vehicle parts (-1.5%), aircraft (-2.4%) and aircraft engines, aircraft parts and other aerospace products (-2.3%). The decrease in prices for motorized and recreational vehicles was closely linked to the appreciation of the Canadian dollar relative to the US dollar.

Electrical, electronic and audio-visual telecommunications products (-1.2%) also decreased in January, mainly due to lower prices for electronic and electrical parts (-2.7%) and communication and audio and video equipment (-1.4%).

Some IPPI prices are reported in US dollars and 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 December to January, the Canadian dollar rose 2.7% relative to the US dollar. If the exchange rate had remained constant, the IPPI would have increased 1.0% instead of 0.3%.

Industrial Product Price Index, 12-month change

The IPPI increased 2.0% over the 12-month period ending in January, after posting a 2.3% increase in December.

Compared with January 2017, the increase in the IPPI in January 2018 was mainly due to higher prices for energy and petroleum products (+12.0%), which have been increasing year over year since December 2016. Higher prices for motor gasoline (+10.9%), light fuel oils (+20.0%) and diesel fuel (+17.3%) were largely responsible for the increase in this product group. The IPPI excluding energy and petroleum products rose 0.6% year over year.

Primary non-ferrous metal products (+5.4%) posted a sixth consecutive year-over-year increase in January. The gain in this commodity group was mainly due to higher prices for unwrought copper and copper alloys (+16.2%), unwrought aluminum and aluminum alloys (+12.7%) and other unwrought non-ferrous metals and non-ferrous metal alloys (+10.9%).

Pulp and paper products (+8.6%) also contributed to the year-over-year increase in the IPPI, mainly due to higher prices for wood pulp (+20.6%).

The meat, fish and dairy products group (+2.3%) also rose compared with January 2017. This increase was mainly due to higher prices for fresh and frozen beef and veal (+7.0%) and fresh and frozen pork (+4.5%).

The year-over-year increase in the IPPI was primarily moderated by lower prices for motorized and recreational vehicles (-4.0%), particularly passenger cars and light trucks (-4.5%) and, to a lesser extent, motor vehicle engines and motor vehicle parts (-3.0%) and aircraft (-4.2%).

Raw Materials Price Index, monthly change

The RMPI rose 3.3% in January, following a 0.9% decline the previous month. Of the six major commodity groups, four were up, one was down and one was unchanged.

Chart 2  Chart 2: Prices for raw materials increase
Prices for raw materials increase

The increase in the RMPI was primarily due to higher prices for crude energy products (+5.9%), specifically conventional crude oil (+5.9%). The RMPI excluding crude energy products rose 1.2% in January.

Prices for animals and animal products also contributed to the increase in the RMPI, rising by 1.9% after declining 0.2% in December. Higher prices for live animals (+3.3%), particularly for hogs (+7.4%) and, to a lesser extent, cattle and calves (+1.6%), were largely responsible for the gain in animals and animal products.

Prices for metal ores, concentrates and scrap (+1.5%) increased for the fourth consecutive month in January.

Raw Materials Price Index, 12-month change

The RMPI rose 7.7% over the 12-month period ending in January, after posting an increase of 6.2% in December.

Compared with January 2017, the increase in the RMPI in January 2018 was mainly due to higher prices for crude energy products (+12.9%), which have been increasing year over year since July 2017. The increase in this commodity group was largely attributable to higher prices for conventional crude oil (+13.2%). Year over year, the RMPI excluding crude energy products rose 3.6%.

To a lesser extent, metal ores, concentrates and scrap also contributed to the increase in the RMPI, with prices rising by 8.2% in January following an 8.7% gain the previous month.

Prices for animals and animal products rose 1.9% year over year, continuing an upward trend that began in February 2017. The increase in this commodity group was mainly due to higher prices for hogs (+6.2%) and fish, shellfish and other fishery products (+9.5%). The decline in prices for cattle and calves (-1.7%) moderated the gain in animals and animal products.



  Note to readers

The Industrial Product Price Index (IPPI) and Raw Materials Price Index (RMPI) are available at the Canada level only. Selected commodity groups within the IPPI are also available by region.

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 established by the Bank of Canada and available in CANSIM table 176-0081 (series v111666275). 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.

A Historical Timeline of Canadian Producer Price Statistics

The publication "A Historical Timeline of Canadian Producer Price Statistics," which is part of the Prices Analytical Series (Catalogue number62F0014M), was created to showcase the key milestones in the history of Canadian producer price statistics. This historical timeline contains answers to questions such as: Who collected Canada's first statistics? What do Canadian producer price indexes measure?

Infographic: Producer Price Indexes at a Glance

The infographic "Producer Price Indexes at a Glance," which is part of Statistics Canada — Infographics (Catalogue number11-627-M), demonstrates how producer price indexes for goods and services are calculated and why they are important for the Canadian economy.

Real-time CANSIM tables

Real-time CANSIM table 329-8074 will be updated on March 12. For more information, consult the document Real-time CANSIM tables.

Next release

The industrial product and raw materials price indexes for February will be released on March 29.

Contact information

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).

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