Industrial product and raw materials price indexes, July 2024

Released: 2024-08-21

Prices of products manufactured in Canada, as measured by the Industrial Product Price Index (IPPI), were unchanged month over month in July and rose 2.9% on a yearly basis. Prices of raw materials purchased by manufacturers operating in Canada, as measured by the Raw Materials Price Index (RMPI), rose 0.7% month over month in July and increased 4.1% year over year.

Chart 1 
Prices for industrial products unchanged in July

Industrial Product Price Index

On a monthly basis, the IPPI was unchanged in July following a 0.1% decrease in June. Higher prices for energy and petroleum products (+2.0%) were offset by lower prices for lumber and other wood products (-3.4%). Excluding energy and petroleum products, the IPPI declined 0.2%.

Prices for energy and petroleum products rose 2.0% month over month in July, after posting two straight monthly declines. Prices for finished motor gasoline (+2.5%) were the largest driver of the increase. Diesel fuel prices (+2.5%) also increased on a monthly basis. Higher gasoline prices were mainly driven by increased gasoline demand during the summer. According to US Energy Information Administration (EIA) estimates, on a monthly basis, global petroleum and other liquid fuels consumption has surpassed total production each month from May to July. EIA estimates also reported that US gasoline stocks had been trending downward since the beginning of the year. In July, gasoline stocks fell 2.7% compared with the previous month.

Prices for lumber and other wood products fell 3.4% from June to July, mainly on lower prices for softwood lumber (-7.8%). This was the fourth consecutive monthly decrease for softwood lumber and the largest decline since September 2022 (-9.6%). The decline was mainly attributable to lower demand caused by a slowing housing market in both Canada and the United States. Seasonally adjusted housing starts in Canada declined 1.5% from the first quarter to the second quarter of 2024, according to Canada Mortgage and Housing Corporation data. Quarterly housing starts in the United States dropped 4.8% in the second quarter, reaching the lowest level since the second quarter of 2020.

Prices of chemicals and chemical products fell 0.7% month over month in July 2024, mainly on lower prices for ammonia and chemical fertilizers (-14.8%). This was the largest month-over-month decline for ammonia and chemical fertilizers since August 2022 (-17.3%). Prices for fertilizers normally drop in July with a slowdown in seasonal demand. Lower prices for fertilizers were largely offset in July 2024 by an increase in prices for petrochemicals (+5.0%), which were partly influenced by higher prices of crude energy products (+2.2%).

The prices of meat, fish and dairy products decreased 0.4% from June to July, following four straight monthly increases. Lower prices for fresh and frozen beef and veal (-3.6%) were mainly behind the monthly decrease in the group. A slowdown in demand put downward pressure on beef prices in July. Despite the decrease in beef prices, prices for cattle and calves (+0.4%) were up for the sixth month in a row, mainly due to tight supply. According to Agriculture and Agri-Food Canada, cattle slaughter numbers fell in both Canada and the United States on a monthly and yearly basis in July.

Prices for primary non-ferrous metal products edged up 0.1% month over month in July. Higher prices for unwrought gold, silver, and platinum group metals, and their alloys (+1.6%) were largely offset by a decrease in nickel prices (-6.5%). Gold prices were up in part due to growing speculation that the US Federal Reserve could cut interest rates in the coming months. Elevated geopolitical tensions between Israel and other Middle Eastern countries also supported the price of gold in July by spurring safe-haven demand. Lower nickel prices were mainly due to the ongoing high level of supply from Indonesian producers.

Year over year

The IPPI rose 2.9% year over year in July.

Unwrought gold, silver, and platinum group metals, and their alloys (+25.3%) were the largest contributor to the IPPI's upward year-over-year movement in July. Economic and geopolitical uncertainty around the globe contributed to the rise of precious metal prices over the 12 months ending in July. Prices for unwrought aluminum and aluminum alloys (+26.3%), petrochemicals (+20.6%), and diesel fuel (+5.4%) were also noteworthy contributors to the IPPI's year-over-year increase.

On the other hand, prices declined year over year in July for grain and oilseed products, n.e.c. (not elsewhere classified) (-19.7%), softwood lumber (-11.2%), and unwrought nickel and nickel alloys (-19.1%).

Raw Materials Price Index

The RMPI rose 0.7% month over month in July, mainly due to higher prices for crude energy products (+2.2%). Excluding crude energy products, the RMPI was down 0.2%.

Prices for crude energy products rose 2.2% in July, after falling for two straight months. The monthly increase was mainly driven by higher prices for conventional crude oil (+2.2%). Ongoing geopolitical tension in the Middle East and the low level of crude oil production from the Organization of the Petroleum Producing Countries and its partners (OPEC+) contributed to higher crude oil prices. The EIA estimated that OPEC+ crude oil production in July was 2.0% lower than it was in July 2023.

Prices for crop products (-1.6%) fell for the second consecutive month in July. Wheat (-9.3%) and grains (except wheat) (-4.0%) were the principal contributors to the decline. Prices for both commodities were pushed down in part by strong production in the United States and Canada. According to the United States Department of Agriculture's grain stocks report released on June 28, all wheat stocks in the US were 23.3% higher on June 1, 2024, compared with June 1, 2023. Other grains experienced substantial increases as well. For example, US corn stocks were 21.7% larger on June 1, 2024, relative to the same date a year prior.

Prices for logs, pulpwood, natural rubber and other forestry products fell 3.9% month over month in July. Logs and bolts (-3.0%) were down for the third consecutive month. The recent downward trend in softwood lumber prices had an impact on the prices of logs and bolts.

Year over year

The RMPI rose 4.1% on a yearly basis in July, posting a fifth straight year-over-year increase.

Prices for gold, silver, and platinum group metal ores and concentrates (+30.4%) were the primary contributor to the year-over-year increase of the RMPI in July. Other product groups that experienced notable year-over-year price increases include conventional crude oil (+7.1%), cattle and calves (+12.0%), and synthetic crude oil (+5.3%). Cattle supply was tight throughout the year in both Canada and the United States.

Major downward contributors to the RMPI's year-over-year change include canola (-21.4%), nickel ores and concentrates (-19.7%), and logs and bolts (-14.0%). Canola and nickel experienced generally high levels of supply over the 12 months ending in July 2024.

Chart 2 
Prices for raw materials rise in July

Contact information

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