Industrial product and raw materials price indexes, April 2013
The Industrial Product Price Index (IPPI) declined 0.8% in April, led by lower prices for petroleum and coal products. The Raw Materials Price Index (RMPI) fell 2.2%, mostly because of decreased prices for crude oil.
Industrial Product Price Index, monthly change
The IPPI posted the first decrease since November 2012, as most commodity groups were down. It was the largest decline since December 2011. Of the 21 major commodity groups, 14 were down, 3 were up, and 4 were unchanged.
The largest contributor to the decline of the IPPI in April was petroleum and coal products (-3.0%), which fell largely because of lower prices for fuel oil and other fuels (-4.7%), specifically diesel fuel (-4.9%), as well as gasoline (-3.6%). The decrease in gasoline prices was partly due to high inventories of crude oil in North America. The IPPI excluding petroleum and coal products declined 0.4% in April.
Primary metal products (-2.8%) also contributed significantly to the decline of the IPPI, mainly as a result of lower prices for other non-ferrous metal products, specifically silver and platinum (-8.7%) and gold and gold alloys in primary form (-6.3%). There were also declines in copper and copper alloy products (-5.6%) and nickel products (-7.1%).
Among the other product groups that decreased was motor vehicles and other transportation equipment (-0.4%). The increase in the value of the Canadian dollar against the US dollar was largely responsible for this decline.
Some Canadian producers who export their products report their prices in US dollars. Consequently, the 0.6% appreciation of the Canadian dollar relative to the US dollar may have had the effect of pushing the IPPI downward. Without the measurable effect of the exchange rate, the index would have fallen 0.6% instead of 0.8%.
The decline of the IPPI in April was moderated slightly by chemical products and rubber, leather and plastic fabricated products.
Industrial Product Price Index, 12-month change
Compared with April 2012, the IPPI was unchanged, even though most commodity groups were up.
Prices for lumber and other wood products (+10.3%) continued to rise on a year-over-year basis, extending the upward trend that began in February 2012. Higher prices for softwood lumber (+19.9%) were largely responsible for the increase in this commodity group.
Motor vehicles and other transportation equipment (+1.7%) also posted a year-over-year gain, mostly due to the 2.6% depreciation of the Canadian dollar relative to the US dollar. Without the measurable effect of the exchange rate, the IPPI would have fallen 0.6% instead of being unchanged.
Among the other product groups that increased were electrical and communications products (+2.0%), pulp and paper products (+1.4%) and fruit, vegetables, feeds and other food products (+1.1%).
Conversely, primary metal products (-5.3%) and petroleum and coal products (-3.3%) mainly offset the year-over-year price increases.
Compared with the same month a year earlier, the decrease in primary metal products was largely attributable to other non-ferrous metal products (-10.1%), iron and steel products (-3.0%) and copper and copper alloy products (-5.7%).
Gasoline (-6.9%) and fuel oil and other fuels (-2.2%) were mostly responsible for the decline in petroleum and coal products. The IPPI excluding petroleum and coal products was up 0.5% on a year-over-year basis.
Raw Materials Price Index, monthly change
The RMPI fell 2.2% in April, the second consecutive monthly decline and the largest decrease since June 2012. All major product groups except one were down or unchanged.
The decrease of the RMPI was primarily due to mineral fuels (-2.5%), particularly crude oil (-2.8%), which fell for a second straight month. The decline in crude oil prices partly reflected poor economic growth prospects among the largest petroleum consumers. The RMPI excluding mineral fuels was down 1.8% in April.
Non-ferrous metals (-4.7%) also contributed to the decrease of the RMPI in April, mainly as a result of lower prices for copper concentrates (-8.0%). Precious metals (-6.8%), zinc concentrates (-3.1%) and other non-ferrous base metals (-3.3%) were also down.
To a lesser extent, vegetable products (-1.5%) also contributed to the RMPI decline, mostly because of lower prices for grains (-2.8%), specifically corn and wheat.
The decrease of the RMPI was moderated slightly by non-metallic mineral products.
Raw Materials Price Index, 12-month change
Compared with April 2012, the RMPI was down 1.9%. The last year-over-year increase in the index was in February 2012.
The year-over-year decline of the RMPI was largely due to lower prices for mineral fuels, specifically crude oil (-3.3%), which continued the downward trend that began in March 2012. The RMPI excluding mineral fuels fell 1.1% on a year-over-year basis.
Non-ferrous metals (-5.8%) also contributed to the year-over-year decrease of the RMPI, as a result of lower prices for copper concentrates (-7.0%), radioactive concentrates (-15.4%) and other non-ferrous base metals (-7.6%).
Compared with the same month a year earlier, the decrease of the RMPI was moderated slightly by wood products (+6.8%) and animals and animal products (+1.5%).
Note to readers
With each release, data for the previous six months may have been revised. The indexes are not seasonally adjusted.
The 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 indicate their prices in foreign currencies, especially in US dollars, which are then converted into Canadian dollars. In particular, this is the case for motor vehicles, pulp, paper and wood products. Therefore, a rise or fall in the value of the Canadian dollar against its US counterpart affects the IPPI. But the conversion into Canadian dollars only reflects how respondents provide their prices. This is not a measure that takes the full effect of exchange rates into account.
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 release, are calculated according to the indirect quotation of the exchange rate (for example, CAN$1 = US$X).
The Raw Materials Price Index (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.
Statistics Canada is undertaking two important initiatives for the IPPI and the RMPI.
The classification of the IPPI and the RMPI will change soon and the basket will be updated to 2010=100. These changes will take place in late 2013. For more information, please refer to Upcoming changes.
Table CANSIM table329-0056: Industrial Product Price Index, by major commodity aggregations.
Table CANSIM table329-0057: Industrial Product Price Index, by industry.
Table CANSIM table329-0058: Industrial Product Price Index, by stage of processing.
Tables CANSIM table329-0059 to 329-0068: Industrial Product Price Index, by commodity.
Table CANSIM table330-0007: Raw Materials Price Index, by commodity.
Definitions, data sources and methods: survey numbers survey number2306 and survey number2318.
The April 2013 issue of Industry Price Indexes (Catalogue number62-011-X) will be available soon.
The industrial product and raw materials price indexes for May will be released on June 28.
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; email@example.com) or Media Relations (613-951-4636; firstname.lastname@example.org).
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