Industrial product and raw materials price indexes, May 2013
The Industrial Product Price Index (IPPI) was unchanged from April. Higher prices for petroleum and coal products offset declines for primary metal products and lumber and other wood products. The Raw Materials Price Index (RMPI) rose 0.2% in May, mostly as a result of higher prices for animals and animal products.
Industrial Product Price Index, monthly change
The IPPI remained at the same level in May, after falling 0.9% in April. Of the 21 major product groups, 7 were up, 8 were down and 6 were unchanged.
Petroleum and coal products (+1.1%) posted the largest gain, following two consecutive declines. The increase was mainly a result of higher prices for gasoline (+3.6%). The IPPI excluding petroleum and coal products was down 0.2% in May.
The advance in petroleum and coal products was largely offset by declines in primary metal products (-1.1%) and lumber and other wood products (-1.1%).
The decrease in primary metal products was attributable mostly to lower prices for other non-ferrous metal products (-2.8%), specifically gold and gold alloys in primary form as well as silver and platinum. Nickel products (-4.2%) and aluminum products (-0.9%) were also down. With the exception of February, prices for primary metal products have been falling since the beginning of 2013.
The decline in lumber and other wood products was largely because of lower prices for lumber and ties (-2.0%) and, to a lesser extent, softwood veneer and plywood (-6.3%).
Industrial Product Price Index, 12-month change
Compared with May 2012, the IPPI was unchanged, after edging down 0.1% in April.
The largest advance was in lumber and other wood products (+6.9%), specifically lumber and ties (+11.5%). Prices for lumber and other wood products remained on the upward trend that started in February 2012.
Prices for motor vehicles and other transportation equipment (+0.6%) also increased on a year-over-year basis, mostly because of the 1.0% depreciation in the Canadian dollar relative to the US dollar. Without the measurable effect of the exchange rate, the IPPI would have fallen 0.2% instead of remaining unchanged.
Among the other product groups that advanced were fruit, vegetables, feeds and other food products (+1.2%) as well as electrical and communications products (+1.6%).
Conversely, primary metal products (-5.1%) and chemical products (-2.1%) largely offset the year-over-year price increases.
Compared with May 2012, the decrease in primary metal products was attributable mostly to lower prices for other non-ferrous metal products (-10.3%), particularly gold and gold alloys in primary form as well as silver and platinum. Year-over-year, prices for primary metal products have declined since November 2011.
Chemical products were down on a year-over-year basis, mainly as a result of lower prices for fertilizers (-18.2%), specifically urea (-29.8%).
Raw Materials Price Index, monthly change
Following two consecutive decreases, the RMPI rose 0.2% in May. Of the major product groups, 4 were up, 2 were down and 1 was unchanged.
The largest contributor to the increase of the RMPI was animals and animal products (+2.8%), mostly because of higher prices for hogs-swine for slaughter (+10.2%) and cattle for slaughter (+4.5%). It was the largest increase since June 2012 for animals and animal products.
To a lesser extent, vegetable products (+1.0%) also contributed to the RMPI advance, largely because of higher prices for grain (+1.6%), natural rubber and allied gums (+4.2%) and oilseeds (+1.2%).
Conversely, the advance of the RMPI was moderated mainly by non-ferrous metals (-1.4%) and ferrous materials (-5.3%).
The decline in non-ferrous metals was largely attributable to lower prices for precious metals (-4.6%), copper and nickel concentrates (-0.7%) and non-ferrous metal scrap (-1.1%). It was the third consecutive decrease for non-ferrous metals.
The decline in ferrous materials was led by lower prices for iron ore (-9.2%).
Raw Materials Price Index, 12-month change
Compared with May 2012, the RMPI was down 0.8%, continuing the downward trend that began in March 2012.
Non-ferrous metals (-7.2%) posted the largest year-over-year decrease, mainly as a result of lower prices for radioactive concentrates (-20.9%), copper and nickel concentrates (-6.2%) and precious metals (-10.9%).
Mineral fuels (-0.8%) also contributed to the year-over-year RMPI decline, mostly because of lower prices for crude oil (-1.1%).
Compared with the same month a year earlier, animals and animal products (+4.6%) moderated the decline of the RMPI, specifically hogs-swine for slaughter (+11.5%) and cattle for slaughter (+5.8%). Wood products and vegetable products were also up on a year-over-year basis.
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.
Upcoming changes: Basket update and new classification
Statistics Canada is undertaking two important initiatives for the IPPI and the RMPI program.
Changes will soon be made in the IPPI and RMPI classification, and the basket will be updated (2010=100). These changes will be made at the end of 2013. For more information, see 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 May 2013 issue of Industry Price Indexes (Catalogue number62-011-X) will be available soon.
The industrial product and raw materials price indexes for June will be released on July 30.
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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