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Industrial product and raw materials price indexes
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The Industrial Product Price Index (IPPI) edged up 0.1% in July, led mainly by primary metal products. The Raw Materials Price Index (RMPI) rose 1.8%, largely because of higher prices for crude oil.
The IPPI edged up 0.1%, following a 0.9% drop in June. In July, 12 major product groups were up compared with 7 in June.
In July, the IPPI advance was mainly led by primary metal products (+1.4%), while lower petroleum and coal prices (-0.9%) had a moderating influence on the overall index.
Other than primary metal products, few products made a significant contribution to the IPPI increase. Among them, motor vehicles and other transportation equipment (+0.3%) as well as pulp and paper products (+0.6%) posted advances, as a result of the depreciation of the Canadian dollar relative to its American counterpart.
In July, the 0.5% decrease in the value of the Canadian dollar against the US dollar had a modest influence on the IPPI gain. Some Canadian producers who export their products to the United States are generally paid on the basis of prices set in US dollars. Consequently, the weakness of the Canadian dollar in relation to the American dollar had the effect of increasing the corresponding prices in Canadian dollars. If the exchange rate used to convert these prices had remained at the same level, the IPPI would have been unchanged instead of up 0.1%.
Conversion of indexes to 2002=100
In September 2010, the Industrial Product Price Index (IPPI) and the Raw Materials Price Index (RMPI) will be published on the time base of 2002=100, with 2002 weights.
The new indexes will appear in CANSIM with the publication of data for the reference month of August 2010. The new series will appear in new CANSIM tables with new vectors. The old indexes, based on 1997=100, will be terminated with the data for the reference month of July 2010.
All data in this release are seasonally unadjusted and are subject to revision for six months (for example, when the July index is released, the index for the preceding January becomes final).
The 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.
The conversion of prices received in US dollars is based on the average monthly exchange rate (noon spot rate) established by the Bank of Canada, and it is available on CANSIM in table 176-0064 (series v37426). Monthly and annual variations in the exchange rate, as described in the text, 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, most prices are denominated in Canadian dollars. For this reason, conversion into Canadian dollars has only a minor effect on the calculation of the RMPI. Moreover, the full effect of exchange rates on the RMPI is not measured, since that is a more difficult analytical task.
Excluding petroleum and coal prices, the IPPI rose 0.3% in July compared with a 0.7% decline in June.
12-month change in the IPPI: Third consecutive increase
The IPPI was up 1.0% in July compared with the same month a year earlier. The index posted a third consecutive gain, smaller than the increase in May (+1.5%) but larger than the one in June (+0.2%).
The increase in the IPPI over the past 12 months was led mostly by higher prices for primary metal products (+9.4%) and petroleum and coal products (+7.5%). To a lesser extent, chemical products (+4.6%) as well as pulp and paper products (+2.3%) contributed to the advance of the IPPI in July.
The IPPI year-over-year advance was moderated by lower prices for motor vehicles and other transportation equipment (-3.9%). This decline was primarily a result of a 7.6% appreciation of the Canadian dollar relative to the US dollar. If the direct effect of the exchange rate had been excluded, the IPPI would have risen 2.8% instead of 1.0%.
Between July 2009 and July 2010, prices for products excluding petroleum and coal increased 0.3%, registering its first gain since May 2009.
Raw Materials Price Index: Upswing after two consecutive declines
The Raw Materials Price Index (RMPI) increased 1.8% following consecutive declines in May (-7.3%) and June (-0.2%).
In July, higher prices for mineral fuels (+1.8%) and, to a lesser extent, non-ferrous metals (+3.6%) and vegetable products (+4.1%) were the main factors in the RMPI growth.
Prices for almost all major products were up, except for wood products and non-metallic minerals.
Crude oil prices rose 3.0% in July following a 2.4% increase in June. These consecutive advances were insufficient to bring the index back up to its level prior to May, the month when crude oil prices (-14.2%) fell significantly.
Excluding mineral fuels, the RMPI rebounded 1.7% following two consecutive monthly declines.
Compared with the same month a year earlier, raw materials prices increased 6.0% in July, after remaining unchanged in June. In July, raw material prices were up mainly as a result of higher prices for mineral fuels, which increased 7.9%.
The prices of non-ferrous metals (+7.9%), ferrous materials (+20.4%) as well as animals and animal products (+3.1%) contributed, to a lesser extent, to the year-over-year RMPI advance in July.
Available on CANSIM: tables 329-0038 to 329-0049 and 330-0006.
Tables 329-0040 to 329-0049: Industrial Product Price Index by commodity.
Table 329-0039: Industrial Product Price Index by total commodity aggregation and stage of processing.
Table 329-0038: Industrial Product Price Index by industry.
Table 330-0006: Raw Materials Price Index by commodity.
Definitions, data sources and methods: survey numbers, including related surveys, 2306 and 2318.
The July 2010 issue of Industry Price Indexes (62-011-X, free) will soon be available.
The industrial product and raw material price indexes for August will be released on September 29.
For more information, or to enquire about the concepts, methods or data quality of this release, contact Client Services (toll-free 1-888-951-4550; 613-951-4550; fax: 613-951-3117; ppd-info-dpp@statcan.gc.ca), Producer Prices Division.
Table 1
| Relative importance1 | July 2009 | June 2010r | July 2010p | June to July 2010 | July 2009 to July 2010 | |
|---|---|---|---|---|---|---|
| (1997=100) | % change | |||||
| Industrial Product Price Index (IPPI) | 100.00 | 115.6 | 116.6 | 116.7 | 0.1 | 1.0 |
| IPPI excluding petroleum and coal products | 94.32 | 110.5 | 110.5 | 110.8 | 0.3 | 0.3 |
| Aggregation by commodities | ||||||
| Meat, fish and dairy products | 5.78 | 112.8 | 113.3 | 113.1 | -0.2 | 0.3 |
| Fruit, vegetables, feeds and other food products | 5.99 | 117.9 | 116.3 | 116.7 | 0.3 | -1.0 |
| Beverages | 1.57 | 129.7 | 132.0 | 131.9 | -0.1 | 1.7 |
| Tobacco and tobacco products | 0.63 | 223.7 | 224.6 | 224.6 | 0.0 | 0.4 |
| Rubber, leather and plastic fabricated products | 3.30 | 120.3 | 123.3 | 123.0 | -0.2 | 2.2 |
| Textile products | 1.58 | 102.1 | 101.3 | 101.5 | 0.2 | -0.6 |
| Knitted products and clothing | 1.51 | 105.1 | 104.0 | 104.2 | 0.2 | -0.9 |
| Lumber and other wood products | 6.30 | 82.2 | 82.3 | 81.9 | -0.5 | -0.4 |
| Furniture and fixtures | 1.59 | 124.6 | 124.5 | 124.5 | 0.0 | -0.1 |
| Pulp and paper products | 7.23 | 106.5 | 108.3 | 109.0 | 0.6 | 2.3 |
| Printing and publishing | 1.70 | 124.5 | 124.0 | 124.1 | 0.1 | -0.3 |
| Primary metal products | 7.80 | 124.3 | 134.1 | 136.0 | 1.4 | 9.4 |
| Metal fabricated products | 4.11 | 131.6 | 131.8 | 131.9 | 0.1 | 0.2 |
| Machinery and equipment | 5.48 | 110.6 | 108.0 | 108.1 | 0.1 | -2.3 |
| Motor vehicles and other transport equipment | 22.16 | 93.7 | 89.7 | 90.0 | 0.3 | -3.9 |
| Electrical and communications products | 5.77 | 94.3 | 91.4 | 91.5 | 0.1 | -3.0 |
| Non-metallic mineral products | 1.98 | 129.1 | 129.2 | 129.2 | 0.0 | 0.1 |
| Petroleum and coal products2 | 5.68 | 209.9 | 227.6 | 225.6 | -0.9 | 7.5 |
| Chemicals and chemical products | 7.07 | 128.9 | 134.6 | 134.8 | 0.1 | 4.6 |
| Miscellaneous manufactured products | 2.40 | 122.6 | 126.5 | 126.5 | 0.0 | 3.2 |
| Miscellaneous non-manufactured products | 0.38 | 268.5 | 211.7 | 215.8 | 1.9 | -19.6 |
| Intermediate goods3 | 60.14 | 118.2 | 120.8 | 121.0 | 0.2 | 2.4 |
| First-stage intermediate goods4 | 7.71 | 124.1 | 134.3 | 136.1 | 1.3 | 9.7 |
| Second-stage intermediate goods5 | 52.43 | 117.3 | 118.8 | 118.7 | -0.1 | 1.2 |
| Finished goods6 | 39.86 | 111.7 | 110.2 | 110.4 | 0.2 | -1.2 |
| Finished foods and feeds | 8.50 | 120.6 | 121.6 | 121.6 | 0.0 | 0.8 |
| Capital equipment | 11.73 | 102.7 | 99.1 | 99.3 | 0.2 | -3.3 |
| All other finished goods | 19.63 | 113.2 | 112.0 | 112.1 | 0.1 | -1.0 |
Table 2
| Relative importance1 | July 2009 | June 2010r | July 2010p | June to July 2010 | July 2009 to July 2010 | |
|---|---|---|---|---|---|---|
| (1997=100) | % change | |||||
| Raw Materials Price Index (RMPI) | 100.00 | 153.4 | 159.8 | 162.6 | 1.8 | 6.0 |
| RMPI excluding mineral fuels | 64.84 | 116.3 | 119.2 | 121.2 | 1.7 | 4.2 |
| Mineral fuels | 35.16 | 233.6 | 247.5 | 252.0 | 1.8 | 7.9 |
| Vegetable products | 10.28 | 110.3 | 104.5 | 108.8 | 4.1 | -1.4 |
| Animals and animal products | 20.30 | 110.3 | 113.6 | 113.7 | 0.1 | 3.1 |
| Wood | 15.60 | 75.0 | 75.5 | 75.4 | -0.1 | 0.5 |
| Ferrous materials | 3.36 | 129.1 | 154.3 | 155.4 | 0.7 | 20.4 |
| Non-ferrous metals | 12.93 | 160.8 | 167.5 | 173.5 | 3.6 | 7.9 |
| Non-metallic minerals | 2.38 | 176.3 | 174.6 | 174.6 | 0.0 | -1.0 |
