Industrial product and raw materials price indexes, March 2019
Prices for products manufactured in Canada rose 1.3% in March, mainly due to higher prices for energy and petroleum products. Prices for raw materials purchased by manufacturers operating in Canada increased 2.8%, primarily due to higher prices for crude energy products.
Industrial Product Price Index
On a monthly basis, the Industrial Product Price Index (IPPI) was up 1.3% in March, following a 0.3% increase in February. From February to March, the Canadian dollar depreciated 1.2% relative to the US dollar. If the exchange rate had remained constant, the IPPI would have increased 1.0% instead of 1.3%.
The gain in the IPPI was widespread, with 16 commodity groups up, 1 down and 4 unchanged.
The increase in the IPPI was mainly due to higher prices for energy and petroleum products (+6.0%), particularly motor gasoline (+11.4%). The IPPI excluding energy and petroleum products increased 0.5%.
Motorized and recreational vehicles (+0.6%), meat, fish and dairy products (+1.4%) and primary non-ferrous metal products (+1.1%) were also among the contributors to the increase in the IPPI.
Year over year, the IPPI rose 1.5% in March, following a 1.2% gain in February. Motorized and recreational vehicles (+3.1%) and primary ferrous metal products (+8.1%) were the largest contributors to the increase in March. Conversely, lower prices for primary non-ferrous metal products (-4.0%) moderated the year-over-year rise in the IPPI.
Raw Materials Price Index
In March, the Raw Materials Price Index (RMPI) (+2.8%) rose for the fourth consecutive month. Of the six major commodity groups, five were up and one was down.
The rise in the RMPI in March was primarily due to higher prices for crude energy products (+5.3%), particularly conventional crude oil (+5.5%). The RMPI excluding crude energy products increased 0.7%.
Higher prices for animals and animal products (+1.3%) and metal ores, concentrates and scrap (+0.9%) also contributed to the increase in the RMPI, but to a lesser extent.
Year over year, the RMPI was down 1.5% in March, following a 2.1% decrease in February. Metal ores, concentrates and scrap (-3.6%) and crude energy products (-1.3%) were the main sources of the decline in March.
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 established by the Bank of Canada and available in table 33-10-0163-01 (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 (), 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? 62F0014M
Infographic: Producer Price Indexes at a Glance
The infographic "Producer Price Indexes at a Glance," which is part of Statistics Canada — Infographics (), 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 table 18-10-0248-01 will be updated on May 6.
The industrial product and raw materials price indexes for April will be released on May 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).