Statistics Canada
www.statcan.gc.ca
Common menu bar links
Industrial product and raw materials price indexes
Archived Content
Information identified as archived on the Web is for reference, research or recordkeeping purposes. It has not been altered or updated after the date of archiving. Web pages that are archived on the Web are not subject to the Government of Canada Web Standards. As per the Communications Policy of the Government of Canada, you can request alternate formats on the "Contact Us" page.
Prices for manufactured products continued moving upward in January, similar to the pace set in December, led by primary metal products and refined petroleum products. Prices for raw materials surged on the strength of rebounding prices for crude oil.
From December to January, prices charged by manufacturers, as measured by the Industrial Product Price Index (IPPI), rose 0.9%, which is comparable with the average increase for November and December. The rise in the index was caused by a strong rebound in prices for primary metal products and a rise in prices for petroleum and coal products. Except for lumber and other wood products, which registered a decline in prices, all major product groups posted an increase.
The IPPI edged down 0.1% on a 12-month basis, its fourth consecutive decline. Decreases in the prices for motor vehicles and other transport equipment and primary metal products were tempered by a strong increase in prices for petroleum and coal products.
Note to readersThe Industrial Product Price Index (IPPI) reflects the prices that producers in Canada receive as the goods leave the plant gate. It does not reflect what the consumer pays. Unlike the Consumer Price Index, the IPPI excludes indirect taxes and all the costs that occur between the time a good leaves the plant and the time the final user takes possession of it, including the transportation, wholesale, and retail costs. Canadian producers export many goods. They often quote their prices in foreign currencies, particularly for motor vehicles, pulp and paper products, and wood products. Determining the full effect of fluctuating exchange rates on the IPPI is a difficult analytical task. However, it should be noted that many prices collected to calculate the IPPI are quoted in US dollars and then converted into Canadian dollars. Therefore, a rise or fall in the value of the Canadian dollar against its US counterpart affects the IPPI. The Raw Materials Price Index (RMPI) reflects the prices paid by Canadian manufacturers for key raw materials. Many of these prices are set in a world market. Unlike the IPPI, the RMPI includes goods not produced in Canada. |
The exchange rate, reflecting the ongoing effect of the Canadian dollar's strength in relation to its US counterpart, had less of an impact on the increase in prices than in December. In January, the Canadian dollar lost 0.8% of its value in relation to the US dollar. If the exchange rate that is used to convert these prices had remained unchanged from the previous month, the IPPI would have risen 0.6% compared with December instead of 0.9%, and on a 12-month basis, the IPPI would have risen 3.9% rather than falling 0.1%.
The Raw Materials Price Index (RMPI) jumped 3.4% from December to January, a much higher rate of increase than the 0.4% gain recorded in December. In January, the RMPI was pushed up primarily by the rise in prices for mineral fuels and, to a lesser extent, vegetable products and non-ferrous metals.
Compared with January 2007, raw materials cost plants 17.3% more. The increase in the index was driven primarily by higher prices for mineral fuels and vegetable products.
In January, the IPPI was 115.4 (1997=100), up from December's revised level of 114.4. The RMPI was 188.8 (1997=100), up from December's revised level of 182.6.
IPPI: Third consecutive monthly increase
Month over month, manufacturers' prices were mainly propelled by higher prices for primary metal products, petroleum and coal products and, to a lesser extent, fruit, vegetables and feed products.
In January, prices for primary metal products rebounded 3.5% after eight consecutive monthly declines. All major groups of primary metal products registered increases. In response to inflation fears in the United States, combined with the weakening of the US dollar in relation to other currencies, prices for precious metal have surged since October. Prices for copper and nickel products rose as a result of reduced supply as well as a decline in global inventories.
Prices for petroleum and coal products continued to rise at a moderate 2.0%, identical to December's rate. If the prices for petroleum and coal products were excluded, the IPPI would have risen 0.7% instead of 0.9%, down slightly from the 1.0% increase registered in December.
Among the other price increases that contributed the most to the rise in the IPPI were a 1.4% gain for fruit, vegetables and feed products, pushed up by higher prices for canola oils and prepared animal feeds.
By contrast, prices for lumber and other wood products declined 0.6% in January, led by softwood lumber, which declined 1.1% after rebounding 1.6% in December.
IPPI: 12-month change shows that the decline in the IPPI was tempered by higher petroleum prices
The IPPI declined 0.1% from January 2007 to January 2008, after posting three consecutive decreases. Lower prices for motor vehicles and other transport equipment, primary metal products and pulp and paper products were almost offset by a jump in the prices for petroleum and coal products.
Prices for motor vehicles and other transport equipment fell 9.1%, a 10th consecutive price decline. During the same period, the US dollar lost 14.0% of its value against the Canadian dollar.
Primary metal prices continued their downward movement, registering a decrease of 9.3%. With the exception of copper products, all of the major primary metal groups lost ground from January 2007 to January 2008. In particular, the price for nickel products dropped 32.7% and the price for aluminum products fell 16.3%.
Prices also decreased for pulp and paper products, lumber and other wood products, as well as electrical and communication products.
The drop in the IPPI was mainly moderated by higher prices for petroleum and coal products, which jumped 31.5%, a fifth straight increase. If petroleum and coal products were excluded, the IPPI would have fallen 3.2% instead of 0.1%.
RMPI: Prices for raw materials rebound
Prices for raw materials jumped 3.4% in January, after increases of 3.4% in November and 0.4% in December. Raw material prices were pushed up by higher prices for mineral fuels and, to a lesser extent, by increased prices for vegetable products, non-ferrous metals and ferrous materials. However, prices for animals and animal products and wood slowed the rise in the RMPI.
Prices for mineral fuels rose 4.4% in January, led by the price for crude oil, which jumped 5.2% after a 0.6% rise in December. Excluding mineral fuels, the RMPI would have increased 2.3%, a lower rate than the 3.4% gain registered by the total RMPI.
Prices for vegetable products rose a hefty 7.8% after an 8.7% gain in December. In January, the prices for both wheat and canola continued to reflect conditions of limited supply and strong growth in demand. The price for wheat surged 12.6% in January, while the price for canola rose 14.6%.
Non-ferrous metal prices increased 2.2% in January, following two consecutive monthly declines. The increase for non-ferrous metals was mainly due to higher prices for copper concentrates and precious metals.
On a 12-month basis, prices for raw materials rose 17.3%. This strengthens the upward trend and was the highest rate since July 2006. Raw material prices were mainly pushed up by the 47.1% jump in the price of crude oil and, to a lesser extent, the 33.5% increase for vegetable products. If mineral fuels were excluded, the RMPI would have declined 0.2% instead of rising 17.3%.
Available on CANSIM: tables 329-0038 to 329-0049 and 330-0006.
Definitions, data sources and methods: survey numbers, including related surveys, 2306 and 2318.
The January 2008 issue of Industry Price Indexes (62-011-XWE, free) will soon be available.
The Industrial product and raw material price indexes for February will be released on April 1.
For more information, or to enquire about the concepts, methods or data quality of this release, contact the Client Services Unit (613-951-9606; fax: 613-951-1539; prices-prix@statcan.gc.ca) or Danielle Gouin (613-951-3375; danielle.gouin@statcan.gc.ca), Prices Division.
Table(s).
