Industrial product and raw materials price indexes, August 2013
The Industrial Product Price Index (IPPI) increased 0.2% in August, mainly because of higher prices for primary metal products. The Raw Materials Price Index (RMPI) rose 0.9% as a result of higher prices for crude oil and non-ferrous metals.
Industrial Product Price Index, monthly change
The IPPI posted a third consecutive monthly gain in August. Of the 21 major commodity groups, 7 were up, 4 were down, and 10 were unchanged.
The increase of the index was mostly a result of primary metal products (+2.2%), which posted its first gain since February, attributable in part to positive signs of growth in China. Other non-ferrous metal products (+4.7%), copper and copper alloy products (+3.9%) and aluminum products (+1.6%) led the growth. Silver and platinum (+9.9%) as well as gold and gold alloys in primary form (+4.9%) were the main contributors to the advance of other non-ferrous metal products, which was up for the first time since November 2012.
To a lesser extent, lumber and other wood products (+0.5%) also contributed to the increase of the IPPI, mainly because of higher prices for softwood lumber (+1.1%).
Among other groups that posted gains was petroleum and coal products, which edged up 0.1% in August following a 2.4% increase in July.
Conversely, the growth of the IPPI was moderated mostly by fruit, vegetables, feeds and other food products (-0.5%) as well as meat, fish and dairy products (-0.5%).
Industrial Product Price Index, 12-month change
The IPPI rose 1.7% in the 12-month period ending in August, following a 1.4% increase in July.
Compared with August 2012, the advance of the IPPI was mainly attributable to petroleum and coal products (+4.4%), specifically diesel fuel (+4.3%) and gasoline (+2.9%). The IPPI excluding petroleum and coal products was up 1.2% on a year-over-year basis.
During the 12-month period ending in August, motor vehicles and other transportation equipment (+3.0%) also contributed significantly to the increase of the IPPI. The depreciation of the Canadian dollar relative to the US dollar was partly responsible for this gain.
Some Canadian producers who export their products report their prices in US dollars. Consequently, the 4.7% year-over-year decrease in the value of the Canadian dollar relative to the US dollar may have had the effect of increasing the IPPI. Without the measurable effect of the exchange rate, the index would have risen 0.5% instead of 1.7%.
Among other commodity groups that contributed to the year-over-year advance were pulp and paper products (+3.6%), lumber and other wood products (+3.0%) as well as electrical and communication products (+3.3%).
Compared with August 2012, the growth of the IPPI was moderated primarily by fruit, vegetables, feeds and other food products (-1.6%), specifically feeds (-7.3%).
Raw Materials Price Index, monthly change
The RMPI rose 0.9% in August, the fourth consecutive monthly increase. Of the seven major product groups, three were up, two were down, and two were unchanged.
The rise of the index was mainly attributable to higher prices for mineral fuels (+1.7%), specifically crude oil (+1.8%). Crude oil prices increased in August, partly because of political tensions in some oil producing countries. The RMPI excluding mineral fuels increased 0.3% in August.
Non-ferrous metals (+2.8%) also contributed to the increase in the RMPI, mainly as a result of higher prices for copper concentrates (+5.5%) and precious metals (+6.0%). This was the first advance for non-ferrous metals since February.
The growth of the RMPI was moderated partly by a decline in vegetable products (-3.4%), largely because of lower prices for grains (-6.2%), specifically corn (-8.8%). Prices were also down for barley, wheat and oats.
Raw Materials Price Index, 12-month change
The RMPI rose 5.0% in the 12-month period ending in August, after increasing 7.7% in July.
The year-over-year advance of the RMPI was mostly because of higher prices for mineral fuels (+10.4%), specifically crude oil (+10.7%). The RMPI excluding mineral fuels was up 0.3% on a year-over-year basis.
Among other commodity groups that contributed to the year-over-year increase in the RMPI were animals and animal products (+5.1%), ferrous materials (+10.0%) and wood products (+3.7%).
Compared with August 2012, the growth of the RMPI was slightly moderated by vegetable products (-10.1%) and non-ferrous metals (-1.4%).
Note to readers
Statistics Canada is undertaking two important initiatives for the Industrial Product Price Index (IPPI) and the Raw Materials Price Index (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.
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 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 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.
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 August 2013 issue of Industry Price Indexes (Catalogue number62-011-X) will be available soon.
The industrial product and raw materials price indexes for September will be released on October 29.
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; firstname.lastname@example.org) or Media Relations (613-951-4636; email@example.com).
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