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Industrial product and raw materials price indexes, July 2019

Released: 2019-08-30

Prices for products manufactured in Canada were down 0.3% in July. Widespread commodity price declines, led by pork, were partially offset by higher prices for motor gasoline and precious metals. Prices for raw materials purchased by manufacturers operating in Canada were up 1.2%, mainly as a result of higher crude energy products prices.

Chart 1  Chart 1: Prices for industrial products decrease
Prices for industrial products decrease

Industrial Product Price Index

In July, the Industrial Product Price Index (IPPI) was down 0.3%, following a 1.4% decline the previous month. Excluding energy and petroleum products, the IPPI decreased 0.5%.

Of the 21 major commodity groups, 15 were down, 4 were up, and 2 were unchanged.

Prices for meat, fish, and dairy products (-1.9%) decreased for a second consecutive month in July. Lower prices for fresh and frozen pork (-7.1%) accounted for most of the decline, the largest observed for these products since September 2017 (-8.9%). Prices for fresh and frozen beef and veal (-3.3%) also fell in July. Trade restrictions imposed on Canadian meat exports to China were a contributing factor.

Motorized and recreational vehicles prices (-0.8%) were also down in July. Lower prices for these products are closely linked to the appreciation of the Canadian dollar relative to the US dollar.

Price increases for energy and petroleum products (+1.2%), principally motor gasoline (+3.9%), partly offset the IPPI's decline in July. Motor gasoline prices rose across Canada, increasing most in Ontario (+5.2%) and the Atlantic region (+4.9%).

Primary non-ferrous metal products (+0.9%) were also up, mainly reflecting higher prices for unwrought gold and gold alloys (+2.7%), and unwrought silver and silver alloys (+3.5%).

Year over year, the IPPI declined 1.7%, largely as a result of lower prices for energy and petroleum products (-7.8%).

Raw Materials Price Index

Following two months of decline, the Raw Materials Price Index (RMPI) rose 1.2% in July, largely on the strength of higher prices for conventional crude oil (+4.3%).

Of the six major commodity groups, three were up and three were down.

The RMPI excluding crude energy products was down 1.0%, mainly reflecting lower prices for animals and animal products (-2.7%), particularly hogs (-9.6%).

Compared with July 2018, the RMPI fell 9.0%, driven mainly by lower prices for crude energy products (-15.9%).

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



  Note to readers

The Industrial Product Price Index (IPPI) and the 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 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 reflects only 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.

Products

Today, Statistics Canada launched the Producer Prices Portal as a part of a suite of portals for the prices and price indexes. This webpage provides Canadians with a single point of access to a wide variety of statistics and measures related to producer prices. The portal offers an array of information on topics such as manufacturing, construction, professional services, distributive trades and financial services.

The portal will be updated regularly as new information becomes available.

The video "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," 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," part of the series 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 table

Real-time table 18-10-0248-01 will be updated on September 9.

Next release

The industrial product and raw materials price indexes for August will be released on September 30.

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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