Industrial product and raw materials price indexes, December 2024

Released: 2025-01-22

Prices of products manufactured in Canada, as measured by the Industrial Product Price Index (IPPI), rose 0.2% month over month in December and increased 4.1% year over year. Prices of raw materials purchased by manufacturers operating in Canada, as measured by the Raw Materials Price Index (RMPI), grew 1.3% on a monthly basis in December and increased 9.1% year over year.

Chart 1 
Prices for industrial products increase in December

Industrial Product Price Index

The IPPI rose 0.2% month over month in December, the index's third consecutive monthly increase.

As prices for some products in the IPPI are reported in US dollars, changes in the CAD-USD exchange rate can exert an influence on the index. The Canadian dollar depreciated 1.9% against the US dollar from November to December. If the exchange rate for prices reported in US dollars had remained constant from November to December, the IPPI would have decreased 0.1% month over month instead of increasing 0.2%.

Prices for motorized and recreational vehicles rose 0.7% in December, the third consecutive month-over-month increase for the group. Most notably, prices were up for motor vehicle engines and motor vehicle parts (+1.1%), aircraft engines, aircraft parts and other aerospace equipment (+1.9%), and aircraft (+2.1%). Due to the high proportion of products that are denominated in US dollars in the motorized and recreational vehicles product group, changes in the exchange rate tend to affect its monthly price movements. If the exchange rate for prices in the group that are reported in US dollars had remained the same from November to December, the prices of motorized and recreational vehicles would have risen 0.2% instead of 0.7%.

The prices of primary non-ferrous metal products increased 0.8% in December. Prices for unwrought aluminum and aluminum alloys (+1.3%) drove the increase, rising for the third straight month. In mid-November, the Chinese government announced the end of a tax rebate for aluminum exporters in the country, effective December 1. This triggered an increase in aluminum prices abroad that persisted into December as international markets anticipated reduced supply from China. Additionally, the global supply shortage of alumina, a key input in aluminum production, persisted in December and contributed to the rise of aluminum prices.

Lumber and other wood products (+1.3%) also experienced a price increase from November to December. This was the fifth straight month-over-month increase for the product group. Higher prices for softwood lumber (+2.7%) were the key reason for December's monthly gain. Following a weak fall harvesting season, prolonged downtime and temporary layoffs at some Canadian sawmills caused supply constraints that contributed to this price increase.

Prices for meat, fish and dairy products rose 0.8% month over month in December. Increased prices for fresh and frozen beef and veal (+4.7%) outweighed modest declines in prices for fresh and frozen pork (-0.8%) and fresh and frozen poultry (-0.5%). Higher beef prices were mainly due to the long-term shortage of cattle supply in both Canada and the United States. According to Statistics Canada's semi-annual cattle inventory report, the number of cattle in Canada on July 1, 2024, was lower than it was on the same date in 2023 and 2022. In December 2024, cattle slaughter numbers fell on a year-over-year basis in both Canada and the United States.

Lower prices for energy and petroleum products (-0.9%) were the main moderator of the IPPI's month-over-month increase in December. Prices declined for both finished motor gasoline (-1.3%) and diesel fuel (-0.7%). Gasoline prices tend to fall in the winter due to seasonal factors. Diesel prices fell in part because unusually mild Canadian weather reduced demand for distillate fuels, which include diesel and home heating fuel. According to data from Natural Resources Canada, Canadian diesel refiner margins declined 4.3% from November to December.

Year over year

The IPPI increased 4.1% year over year in December. This was the IPPI's third consecutive year-over-year increase, and the eighth over the last nine months.

Prices for unwrought gold, silver, and platinum group metals, and their alloys (+32.4%) were the main contributor to the IPPI's year-over-year gain in December. Prices for these metals increased frequently throughout 2024 as geopolitical uncertainty boosted demand for safe haven assets and falling interest rates made precious metals more attractive to investors.

In contrast, grain and oilseed products, n.e.c. (not elsewhere classified) (-19.4%) posted a significant decline in December. Grain and oilseed product prices were pushed down by stronger global production of oilseeds. Notably, the United States Department of Agriculture's January 2025 World Agricultural Supply and Demand Estimates report estimates that global oilseed supply increased 3.5% in the 2023/2024 crop year.

Raw Materials Price Index

The RMPI grew 1.3% on a monthly basis in December 2024 after edging down 0.1% in November.

The prices of metal ores, concentrates and scrap rose 2.0% from November to December. This marked the fourth consecutive month-over-month increase for this commodity group. Prices for other metal ores and concentrates (+2.4%) drove the group's monthly movement. In particular, the price of antimony, a metal commonly used in electronics and metal alloying, notably increased in December. China, the world's largest antimony producing country, announced in December that it would ban antimony exports to the United States. The news caused a spike in prices by creating concern about the metal's availability on the market.

Prices for crude energy products increased 0.8% month over month in December following a 2.2% decrease in November. Conventional crude oil increased 1.0% in December. The Organization of the Petroleum Exporting Countries and its partners (OPEC+) decided to delay a planned production increase, contributing to higher crude oil prices in December.

Prices for crop products (+2.2%) increased for the fourth month in a row in December. The monthly gain was primarily driven by higher prices for other miscellaneous crop products (+9.4%). Within that category, green coffee bean prices were on the rise in December due to ongoing supply concerns associated with unfavourable weather conditions in top producing nations Brazil and Vietnam.

Year over year

The RMPI was up 9.1% year over year in December. The December 2024 movement was partially influenced by a base period effect, as the RMPI declined 4.9% in December 2023.

Gold, silver, and platinum group metal ores and concentrates (+37.7%) led the year-over-year increase in December 2024. Conventional crude oil (+5.4%), cattle and calves (+19.0%), and synthetic crude oil (+9.0%) were among the other key contributors to the RMPI's year-over-year increase.

By contrast, downward contributors that moderated the RMPI's year-over-year movement in December included iron ores and concentrates (-21.0%), canola (-10.1%), and grains (except wheat) (-14.3%). Iron ore prices were down throughout much of 2024, largely on weak market fundamentals in China, the commodity's largest market.

Chart 2 
Prices for raw materials rise in December

Contact information

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