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Industrial product and raw materials price indexes, October 2021

Released: 2021-11-29

The price of products manufactured in Canada, as measured by the Industrial Product Price Index (IPPI), increased 1.3% month over month in October and 16.7% compared with the same month in 2020. Prices of raw materials purchased by manufacturers operating in Canada, as measured by the Raw Materials Price Index (RMPI), increased 4.8% month over month in October and 38.4% year over year.

Chart 1  Chart 1: Prices for industrial products increase
Prices for industrial products increase

Industrial Product Price Index

The IPPI rose 1.3% month over month in October, following a 1.2% increase in September.

Prices for energy and petroleum products were up by 7.4% in October, and were 72.1% higher than the same month last year. Motor gasoline (+5.3%), diesel and biodiesel fuels (+11.3%), as well as natural gas liquids and related products (+14.7%) all posted monthly increases. These gains were mainly due to higher prices for their feedstocks. Benchmark prices for crude oil reached a five year high in October as global demand outweighed supply. Natural gas prices were lifted in part due to strained supplies in Europe and Asia.

Prices for softwood lumber reversed course in October, posting an 11.9% increase after four consecutive months of decreases. Prices were 3.6% lower year over year, but were 75.7% higher than October 2019. Reduced output from Canadian lumber mills, as well as labour shortages at their counterparts south of the border, both played a role in the monthly increase. Market indicators show that this upward price movement will extend into November, exacerbated in part due to the extreme flooding in the Pacific Northwest.

Chart 2  Chart 2: Softwood lumber (except tongue and groove and other edge worked lumber)
Softwood lumber (except tongue and groove and other edge worked lumber)

The price of meat products fell 6.0% in October, including fresh and frozen beef and veal (-14.3%), and fresh and frozen pork (-6.4%). Nevertheless, prices for meat products were still 8.4% higher than in October 2020.

Prices for ammonia and chemical fertilizers rose by 14.9%. The main factors for this increase were high natural gas prices, supply disruptions due to the aftermath of Hurricane Ida, and curbs on fertilizer exports from China.

Several metal commodities posted higher prices in October. Prices for other non-ferrous metals and alloys—the product group that includes magnesium—increased by 9.1%. Prices for unwrought aluminum and aluminum alloys (+4.6%), as well as unwrought copper and copper alloys (+2.9%), also rose in October.

Raw Materials Price Index

The RMPI was up by 4.8% month over month in October, following a 2.4% increase in September.

Prices for crude energy products were up by 13.0% in October. Conventional crude oil (+12.0%), natural gas (+21.0%) and coal (+25.2%), all posted increases. Prices for oil were driven up by global demand exceeding supply. Natural gas prices in North America have been influenced by the European market, where supplies have been strained amidst colder than expected weather.

Prices for canola increased 4.3% in October and were 78.2% higher than in October 2020. Wheat prices were up by 3.8%, a sixth consecutive monthly increase, putting them 55.0% higher year over year.

Prices for gold, silver, and platinum group metal ores and concentrates were down 4.8%, while copper ores and concentrates (+5.7%) and lead and zinc ores and concentrates (+4.3%) posted increases.

Chart 3  Chart 3: Prices for raw materials rise
Prices for raw materials rise



  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. The IPPI does not reflect what the consumer pays. Unlike the Consumer Price Index, the IPPI excludes indirect taxes and all costs that occur between the time a good leaves the plant and the time the final user takes possession of the good. This includes transportation, wholesale and retail costs.

Canadian producers export many goods. They often indicate their prices in foreign currencies, especially in US dollars, and these prices are then converted into Canadian dollars. This is particularly the case for motor vehicles, pulp and paper products, and wood products. Therefore, fluctuations in the value of the Canadian dollar against its US counterpart affect the IPPI. However, the conversion to Canadian dollars reflects only how respondents provide their prices. This is not a measure that takes into account the full effect of exchange rates.

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.

Discontinuation of IPPI Flash estimates

The IPPI flash estimates, which have been published since March 2020, will no longer be released as of January 2022. The last release will be on December 14, 2021, with the publication of the November 2021 reference month data.

The monthly release of the industrial product and raw materials price indexes will soon be published earlier each month, effective with the release of February 2022 data on March 22, 2022.

Products

Statistics Canada launched the Producer Price Indexes portal as part of a suite of portals for prices and price indexes. This web page provides Canadians with a single point of access to a variety of statistics and measures related to producer prices.

The video "Producer price indexes" is available on the Statistics Canada Training Institute web page. It provides an introduction to Statistics Canada's producer price indexes—what they are, how they are made, and what they are used for.

Next release

The industrial product and raw materials price indexes for November 2021 will be released on January 4, 2022.

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; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).

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