Industrial product and raw materials price indexes, October 2024
Released: 2024-11-21
In October, prices of products manufactured in Canada, as measured by the Industrial Product Price Index (IPPI), rose 1.2% month over month and increased 1.1% year over year. At the same time, prices of raw materials purchased by manufacturers operating in Canada, as measured by the Raw Materials Price Index (RMPI), increased 3.8% month over month and fell 2.8% year over year.
Industrial Product Price Index
The IPPI was up 1.2% month over month in October after posting two months of consecutive declines. This was the largest monthly growth for the IPPI since April 2024 (+1.6%).
The prices of primary non-ferrous metal products rose 5.5% month over month in October, leading the increase in the IPPI. Higher prices for unwrought gold, silver, and platinum group metals, and their alloys (+7.6%) were mainly behind the gain in this group. Precious metal prices were boosted by several factors in October. Middle Eastern conflict, uncertainty surrounding the outcome of the United States election, and interest rate cuts by central banks, all contributed to the higher prices.
Prices for energy and petroleum products increased 2.5% in October following two months of consecutive declines. The increase in this group in October was mainly due to higher prices for refined petroleum energy products (+2.5%), particularly diesel fuel (+6.8%). The monthly increases were partly driven by higher prices for conventional crude oil (+4.6%), the primary input for refined petroleum products.
Prices for motorized and recreational vehicles rose 0.3% month over month in October, mainly due to higher prices for motor vehicle engines and motor vehicle parts (+0.5%) as well as aircraft engines, aircraft parts and other aerospace equipment (+1.0%). In October, the Canadian dollar depreciated 1.5% against the US dollar. As many prices in this category are reported in US dollars, the movement in the exchange rate partially contributed to the monthly price increase in this group.
Prices for lumber and other wood products (+1.3%) rose for the third month in a row in October, mainly due to higher prices for softwood lumber (+2.3%). Sawmill curtailments and closures in the British Columbia Interior region and Quebec caused a reduction in supply that contributed to the price increase.
Year over year
The IPPI was 1.1% higher on a year-over-year basis in October following a 1.0% decline in the previous month. The largest upward contributor to October's year-over-year increase was unwrought gold, silver, and platinum group metals, and their alloys (+39.8%). Other noteworthy upward contributors included unwrought aluminum and aluminum alloys (+30.2%) and unwrought copper and copper alloys (+20.4%).
Multiple product groups declined year over year in October, partly offsetting the IPPI's increase. Most notably, prices were down for diesel fuel (-19.4%), finished motor gasoline (-9.4%), and grain and oilseed products, n.e.c. (not elsewhere classified) (-22.7%).
Raw Materials Price Index
On a monthly basis, the RMPI rose 3.8% in October after posting two consecutive monthly declines. Excluding crude energy products, the RMPI was up 3.1%.
Prices for crude energy products (+5.0%) led the RMPI's monthly increase in October. This was the largest monthly increase for crude energy products since April 2024 (+5.8%). Conventional crude oil was up 4.6% month over month in October while synthetic crude oil prices rose 4.7%. Escalating conflicts in the Middle East increased potential risks to oil supply, putting upward pressure on crude oil prices.
The prices of metal ores, concentrates and scrap also contributed significantly to the RMPI's increase in October, rising 6.8% compared with September. The increase in this group was mainly due to higher prices for gold, silver, and platinum group metal ores and concentrates (+7.2%).
Prices for crop products increased 0.8% on a monthly basis in October, mainly on higher prices for canola (+7.4%), which registered its largest monthly increase since July 2023 (+10.6%). Weather conditions in Canada's canola producing regions led to expectations of smaller canola yields. The resulting drop in forecasted production contributed to the higher canola prices in October.
Year over year
The RMPI fell 2.8% year over year in October 2024, the third consecutive year-over-year decrease.
The largest downward contributors to the RMPI's year-over-year decrease in October were conventional crude oil (-14.6%) and synthetic crude oil (-20.6%), despite prices for both increasing on a monthly basis. In addition, logs and bolts (-15.4%) and grains (-22.0%) also contributed to the yearly decline in the RMPI, to a lesser extent.
Conversely, the largest upward contributor that moderated the RMPI's year-over-year decrease in October was gold, silver, and platinum group metal ores and concentrates (+40.6%). Other contributors had a moderating effect to a lesser extent, including cattle and calves (+7.5%), lead and zinc ores and concentrates (+14.7%), and copper ores and concentrates (+20.2%).
Basket update
The Industrial Product Price Index (IPPI) and Raw Materials Price Index (RMPI) have updated their baskets. As of the August 2024 reference month, the weights of the index values will reflect 2019 production values of Canadian manufacturers, based on data from supply and use tables, the Annual Survey of Manufacturing and Logging Industries and alternative data sources. The IPPI and RMPI series have been migrated from the North American Product Classification System (NAPCS) 2017 Version 2.0 to NAPCS 2022 Version 1.0 as part of the basket update process. IPPI series aggregated according to the North American Industry Classification System (NAICS) 2017 Version 3.0 have been migrated to NAICS 2022 Version 1.0. This process resulted in several modifications, including the addition of new series, the termination of series, and updates made to titles and definitions. Series that existed in our previous basket and did not experience a code change will continue to be calculated relative to the same base period (January 2020=100). New series introduced under the classification system migration have a base period of July (July 2024=100).
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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 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.
Next release
The industrial product and raw materials price indexes for November will be released on December 23.
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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