Machinery and equipment price indexes

The Machinery and Equipment Price Index (MEPI) was 91.6 (1997=100) in the first quarter of 2006, down 0.5% from the fourth quarter of 2005. The domestic component index increased 0.1% while the import index decreased 1.0% during this period. Compared with the first quarter 2005, the index was 3.0% lower, due mainly to a 4.6% decline in the import series. The domestic component index declined 0.4% during this period.

Most industrial sector indexes fell in the first quarter, with declines for finance, insurance and real estate, other services (excluding public administration), manufacturing and trade having the most influence on the total index movement. In the manufacturing sector, declines for primary metal and fabricated metal products (-0.8%) and transportation equipment manufacturing (-0.3%) influenced the index downward. In the service sector, industries contributing to the decline in the index were real estate and rental and leasing services (-1.4%), other services (-1.2%) and information and cultural industries (-0.9%).

At the commodity level, compared to the last quarter, price declines for trucks (-2.6%), computers (-2.1%), passenger vans (-2.1%) and automobiles (-1.5%) contributed to a lower index. Most of the decline in the index can be attributed to lower import prices for these commodities.

The import index continued to be influenced by the decline in the value of the US dollar relative to its Canadian counterpart. The US dollar decreased 1.6% in the first quarter of 2006 and was 5.9% lower than its first quarter 2005 level.

Note: With the release of first quarter 2006 data, The Machinery and Equipment Price Index is converted to a 1997=100 reference year. The index has been updated using a 1997 weighting pattern.

The release of the first quarter data also includes an important classification change. The index previously classified on the 1970 Standard Industrial Classification (SIC) is now based on the 1997 North American Industry Classification System (NAICS). The conversion from SIC to NAICS caused significant changes in the time series.

The most influential change to the rebased MEPI was the updating of the weighting pattern. The 1986=100 index was weighted towards primary and manufacturing industries. The rebased index is more influenced by service sector industries and by public administration. There is a significant shift towards the import component index in the rebased MEPI.

Available on CANSIM: tables 327-0041 and 327-0042.

Definitions, data sources and methods: survey number 2312.

The first quarter 2006 issue of Capital Expenditure Price Statistics (62-007-XIE, free) will be available in July.

For more information, or to enquire about the concepts, methods and data quality of this release, contact Client Services Unit (613-951-9606; fax: 613-951-1539; infounit@statcan.gc.ca) or Adrian Fisher (613-951-9612), Prices Division.