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Machinery and Equipment Price Index, first quarter 2014

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Released: 2014-05-22

The Machinery and Equipment Price Index (MEPI) rose 3.5% in the first quarter compared with the fourth quarter of 2013. The import component was up 5.5% over the period, while the domestic component increased 0.2%.

The Canadian dollar depreciated 4.9% against the US dollar in the first quarter compared with the previous quarter. Variations in exchange rates can have a significant influence on the MEPI given the high weight that imported machinery and equipment have on the index.

All industries posted increases in the prices of machinery and equipment purchased in the first quarter. The largest contributor to the total MEPI quarterly increase was manufacturing (+4.0%), with the transportation equipment manufacturing sub-component rising 4.0% and the primary metal and fabricated metal product manufacturing sub-component up 3.9%. The second largest contributor to the total MEPI quarterly increase was the finance, insurance and real estate industry (+3.2%).

Most commodities posted price increases in the first quarter. Among them, other industry specific machinery (+5.2%), and automobiles, excluding passenger vans (+4.4%) contributed the most to the quarterly increase of the total MEPI.

Compared with the first quarter of 2013, the total MEPI increased 6.4%, with the import component rising 10.6% and the domestic component down 0.1%. The movement in the import component was partly influenced by the year-over-year change in the Canadian dollar (-8.6%) against the US dollar.

  Note to readers

Statistics Canada is undertaking two important initiatives for the Machinery and Equipment Price Index (MEPI) program and changes will be reflected in the MEPI at the end of 2014.

With the release of third quarter 2014 data, the MEPI series will be converted from a base year of 1997=100 to 2010=100. The relative importance of the basket items will be updated using the 2010 annual gross additions to capital for machinery and equipment purchases by industries in Canada.

Also, the MEPI (2010=100) will adopt the commodity and industry classifications incorporated in the current input-output tables of the Canadian System of National Accounts (CSNA) for final demand expenditures by machinery and equipment categories. With the 2012 historical revision of the CSNA, the classifications incorporated in the input-output tables published by Statistics Canada have been updated. The update of the classifications was triggered by the need to capture the evolving structure of the Canadian economy and to align the classifications to updated international classification systems (such as the North American Industry Classification System and the North American Product Classification System). As a result, the number of industry categories used for the MEPI (2010=100) will increase from 60 to 66, while the number of commodity categories will decrease from 106 to 56. For more information regarding the changes applied to the input-output tables, see the Modernization of the Input-Output Tables document.

Concordance information between the old CANSIM vectors and the new CANSIM vectors will be available prior to the MEPI (2010=100) release. For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca).

The Machinery and Equipment Price Index provides quarterly estimates of price changes for machinery and equipment purchased by industries in Canada.

The contribution of a given sub-aggregate to the composite price change depends on both the price change exhibited by the sub-aggregate and its importance in the basket, as measured by the weight.

With each release, data for the previous four quarters may have been revised. The index is not seasonally adjusted.

The Machinery and Equipment Price Index for the second quarter will be released on August 21.

Contact information

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; infostats@statcan.gc.ca) or Media Relations (613-951-4636; statcan.mediahotline-ligneinfomedias.statcan@canada.ca).

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