Industrial product and raw materials price indexes, April 2019
Prices for products manufactured in Canada rose 0.8% in April, driven mainly by higher prices for energy and petroleum products. Prices for raw materials purchased by manufacturers operating in Canada increased 5.6%, primarily on the strength of higher crude energy product prices.
Industrial Product Price Index
On a monthly basis, the Industrial Product Price Index (IPPI) rose 0.8% in April, following a 1.3% increase in March. Of the 21 major commodity groups, 10 were up, 7 were down and 4 were unchanged.
The growth in the IPPI in April was mainly due to higher prices for energy and petroleum products, which rose 4.2%, after a 6.6% increase in March. The gain was mostly driven by higher prices for motor gasoline (+9.2%). The IPPI excluding energy and petroleum products was up 0.3%.
Prices for meat, fish and dairy products (+3.3%) also contributed significantly to the increase in the IPPI, led mainly by higher prices for fresh and frozen pork (+11.6%). This was the largest increase for fresh and frozen pork since March 2014 (+16.5%).
On a year-over-year basis, the IPPI was up 1.8% in April, after rising 1.5% in March. Higher prices for motorized and recreational vehicles (+3.2%) and for meat, fish and dairy products (+5.9%) were primarily responsible for this growth. Conversely, lower prices for primary non-ferrous metal products (-4.4%) largely moderated the year-over-year gain in the IPPI.
Raw Materials Price Index
On a monthly basis, the Raw Materials Price Index (RMPI) rose 5.6% in April, following a 2.8% increase in March. The increase in April marked the fifth consecutive monthly gain, and was the biggest since December 2016 (+6.3%). Of the six major commodity groups, three were up, two were down and one was unchanged.
The growth in the RMPI was largely due to crude energy products (+9.5%), particularly higher prices for conventional crude oil (+9.7%). Downward pressure on the world oil supply, related to production limits by the Organization of the Petroleum Exporting Countries (OPEC) and the tightening of American sanctions against Iran, contributed to this increase. The RMPI excluding crude energy products rose 2.4%.
Prices for animals and animal products were up 7.7%, mainly due to higher prices for hogs (+37.8%), which posted its largest monthly increase since January 1999. A decrease in the global supply of hogs, driven by African swine fever in China, was the main factor for this increase.
Year over year, the RMPI rose 3.2%, the first increase since October 2018, led by higher prices for crude energy products (+4.7%) and animals and animal products (+9.5%).
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 video entitled "Producer Price Indexes" is available on the Statistics Canada Training Institute webpage. It provides an introduction to Statistics Canada's Producer Price Indexes: what they are, how they are made and what they are used for.
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 June 10.
The industrial product and raw materials price indexes for May will be released on June 28.
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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