Industrial product and raw materials price indexes, June 2023
Released: 2023-07-18
June 2023
-0.6% 
(monthly change)
June 2023
-0.9%
(monthly change)
June 2023
-1.5%
(monthly change)
June 2023
-0.7%
(monthly change)
Prices of products manufactured in Canada, as measured by the Industrial Product Price Index (IPPI), decreased 0.6% month over month in June and fell 5.5% year over year. Prices of raw materials purchased by manufacturers operating in Canada, as measured by the Raw Materials Price Index (RMPI), declined 1.5% on a monthly basis in June and were 19.7% lower compared with June 2022.
Chart 1
Prices for industrial products decline
Industrial Product Price Index
The IPPI fell 0.6% month over month in June, a third consecutive monthly decrease. Excluding energy and petroleum products, the IPPI fell 0.9%.
Prices for primary non-ferrous metal products fell 3.7%, leading the monthly decrease in the IPPI. Compared with June 2022, prices were down 1.0% in June 2023. Declines were observed in the prices of precious metals, including unwrought gold and gold alloys (-4.2%), unwrought silver and silver alloys (-5.0%) and unwrought platinum group metals and their alloys (-10.1%). These drops were partly due to a stronger US dollar, as well expectations of further rate hikes by the US Federal Reserve. Prices for several industrial metals also fell in June, including unwrought nickel and nickel alloys (-5.7%) and unwrought aluminum and aluminum alloys (-3.5%). Nickel prices specifically have softened in 2023, as Indonesia has ramped up production. Weak demand in China played a part in the drop in aluminum prices.
Prices for primary ferrous metal products decreased 0.8% on a monthly basis in June, mainly on lower prices for basic and semi-finished iron or steel products (-0.9%).
Chemicals and chemical products posted a monthly price decline of 1.4% in June and fell 10.6% compared with the same month in 2022, the largest year-over-year decrease since August 2009 (-10.9%). The decline was mainly driven by lower prices for plastic resins (-6.9%). Lower prices for plastics were driven by a slowdown in US manufacturing activities, as well as a pessimistic global macroeconomic outlook.
Prices for pulp and paper products fell 2.8% in June, a third consecutive monthly decline. On a yearly basis, the group was down 2.7%, the first year-over-year drop since May 2021. Wood pulp (-5.4%) was mainly responsible for the decrease in this group. Oversupply of pulp in the North American market combined with weakening global demand, especially demand from China, put downward pressure on pulp prices.
Prices for energy and petroleum products rose 2.3% month over month in June, mainly on higher prices for refined petroleum energy products (+2.5%). Refined petroleum products prices were 35.5% lower on a year-over-year basis and were 30.6% lower than the pre-COVID-19 pandemic month of January 2020. The price of conventional crude oil, the raw material used to make refined petroleum products, fell 2.6% in June 2023. Despite this decline in crude oil, finished motor gasoline rose 2.2%, and jet fuel was up 2.9%.
Prices for meat, fish and dairy products rose 0.8% in June, a fifth consecutive monthly increase for the group. Increases were mainly supported by higher prices for fresh and frozen beef and veal (+3.9%). Beef prices have been trending upward since November 2022. Prices were 23.7% higher in June 2023 compared with the same month a year earlier and 55.7% higher compared with January 2020. In June 2023, tight domestic supply was partly behind the beef price increase, and meat processors were reducing their operating hours, mainly due to a shortage in live cattle. In June, Canada's cattle slaughter numbers fell 25.5% compared with the same month in 2022. Cattle slaughter in 2022 was high, due partly to the after-effects of the 2021 drought, which drove up feed prices and pushed producers to sell their cattle for slaughter. Demand for beef remained high in the 2023 summer season, which drove up prices further.
The price of fresh and frozen pork (+1.2%) also rose in June, coinciding with an increase in the price of live hogs (+5.2%) in the RMPI. Year over year, pork prices were 5.9% lower compared with June 2022. In May, US pork inventory in cold storage fell on both a monthly and a yearly basis. Canadian pork exports also strengthened, with the value of pork exports to the US (the largest importer of Canadian pork) and the rest of the world both increasing month over month in May.
Chart 2
Softwood lumber (except tongue and groove and other edge worked lumber)
Raw Materials Price Index
The RMPI fell 1.5% month over month in June, following a 5.0% drop in May. Year over year, the index declined by 19.7%, a fifth consecutive year-over-year decline and the largest drop since April 2020 (-31.6%).
Crude energy products declined 2.8% month over month in June 2023, mainly on lower prices for conventional crude oil (-2.6%) and synthetic crude oil (-3.0%). Compared with the same month in 2022, crude energy prices were down 37.5% in June 2023, the largest year-over-over decrease since May 2020 (-48.9%). The price decrease for crude oil was influenced by concerns about macroeconomic growth.
Prices for metal ores, concentrates and scrap (-3.4%) fell for the second consecutive month in June 2023, driven by lower prices for gold, silver, and platinum group metal ores and concentrates (-5.8%).
Animals and animal products rose 1.6% in June compared with May, and higher prices for cattle and calves (+4.4%) were mainly behind the gain. Shrinking cattle herds in both Canada and the US played a part in driving up cattle prices. Shrinking herd sizes were in part affected by the after-effects of dry weather conditions in 2021. As of June 1, the number of cattle on feed fell 11% in Canada and 3% in the US compared with the same date in 2022. Prices for hogs (+5.2%) were also up in June 2023, but they were 13.1% lower compared with the same month in 2022.
Chart 3
Prices for raw materials decline
Note to readers
The Industrial Product Price Index (IPPI) and the Raw Materials Price Index (RMPI) are available at the Canadian 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 IPPI 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. Canadian producers often indicate goods' prices in foreign currencies, especially in US dollars, which 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 RMPI 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
Statistics Canada launched the Producer Price Indexes Portal as part of a suite of portals for prices and price indexes. This webpage 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 webpage. It introduces Statistics Canada's producer price indexes: what they are, how they are made and what they are used for.
Increased sample size for certain series
Effective with the release of April 2023 data, the sample size for certain IPPI and RMPI indexes has been increased to improve their quality. The complete list of these indexes can be obtained upon request.
Next release
The industrial product and raw materials price indexes for July will be released on August 18.
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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