Industrial product and raw materials price indexes, June 2014
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Released: 2014-07-30
The Industrial Product Price Index (IPPI) edged down 0.1% in June, mainly because of lower prices for motorized and recreational vehicles. The Raw Materials Price Index (RMPI) rose 1.1%, largely as a result of higher prices for crude energy products.
Chart 1
Prices for industrial goods decrease
Industrial Product Price Index, monthly change
The IPPI posted a third consecutive monthly decline in June (-0.1%), after decreasing 0.5% in May. Of the 21 major commodity groups, 4 were up, 11 were down and 6 were unchanged.
The decrease in the IPPI was mainly due to lower prices for motorized and recreational vehicles (-0.3%). Lower prices for passenger cars and light trucks (-0.4%) were largely responsible for the decline in this commodity group. The decrease in the prices of motorized and recreational vehicles was closely linked to the appreciation of the Canadian dollar relative to the US dollar.
Fruit, vegetables, feed and other food products (-0.4%) also put downward pressure on the IPPI, mostly because of lower prices for animal feed (-2.1%), which declined for the first time since November 2013.
Primary non-ferrous metal products (-0.3%) was down for a third consecutive month, mainly as a result of lower prices for unwrought precious metals and precious metal alloys, specifically unwrought gold and gold alloys (-2.3%). The decline was moderated by higher prices for unwrought aluminum and aluminum alloys (+3.4%).
Conversely, the decrease in the IPPI was moderated largely by higher prices for meat, fish and dairy products (+0.8%). Meat products, specifically fresh and frozen pork (+2.0%), were mainly responsible for the advance in this commodity group.
Some Canadian producers who export their products report their prices in US dollars. Consequently, the 0.6% increase in the value of the Canadian dollar relative to the US dollar may have had the effect of lowering the IPPI. Without the measurable effect of the exchange rate, the IPPI would have been unchanged instead of decreasing 0.1%.
Industrial Product Price Index, 12-month change
The IPPI rose 3.0% during the 12-month period ending in June, following a 3.4% gain in May.
Compared with June 2013, the advance of the IPPI was mainly attributable to energy and petroleum products (+5.9%), specifically motor gasoline (+6.2%), light fuel oils (+10.5%) and diesel fuel (+7.2%). The IPPI excluding energy and petroleum products increased 2.5% on a year-over-year basis.
Prices for meat, fish and dairy products were up 7.7% from June 2013, primarily as a result of higher prices for meat products, specifically fresh and frozen pork (+26.5%).
Motorized and recreational vehicles (+3.5%) also contributed to the year-over-year increase of the IPPI, because of higher prices for passenger cars and light trucks (+3.4%), motor vehicle engines and motor vehicle parts (+2.9%) and aircraft (+6.8%). On a year-over-year basis, prices for motorized and recreational vehicles have been on an upward trend since July 2013.
To a lesser extent, chemicals and chemical products (+3.3%) and primary ferrous metal products (+7.8%) also contributed to the year-over-year advance of the IPPI.
Compared with June 2013, the increase in chemicals and chemical products was largely due to higher prices for plastic resins (+10.3%) as well as dyes and pigments, and petrochemicals (+3.5%).
On a year-over-year basis, primary ferrous metal products was pushed upward mainly by higher prices for basic and semi-finished iron and steel products (+8.0%), specifically iron and steel basic shapes (+12.0%).
Raw Materials Price Index, monthly change
The RMPI advanced 1.1% in June, following a 0.3% decline in May. Of the six major commodity groups, two were up, three were down and one was unchanged.
Chart 2
Prices for raw materials increase
The increase in the RMPI was mainly attributable to higher prices for crude energy products (+2.2%), which posted a second consecutive monthly gain. The advance of this commodity group was led by conventional crude oil, up 2.2% from May. The RMPI excluding crude energy products was down 0.2%.
To a lesser extent, animals and animal products also contributed to the increase in the RMPI with a 1.3% gain in June, following a 2.9% decline the previous month. Higher prices for live animals (+1.9%), specifically cattle and calves (+3.0%) and hogs (+1.2%), were primarily responsible for the advance in the animals and animal products group.
The increase of the RMPI was moderated by crop products (-1.9%), down for the first time since December 2013. Lower prices for wheat (-7.1%) and other crop products (-1.1%) were largely responsible for the decline in this commodity group.
Prices for metal ores, concentrates and scrap (-0.8%) also moderated the advance of the RMPI in June, following a 0.3% increase in May.
Raw Materials Price Index, 12-month change
The RMPI increased 9.2% during the 12-month period ending in June, after advancing 7.7% in May.
Compared with June 2013, the increase in the RMPI was mainly attributable to higher prices for crude energy products (+15.6%). This was the largest gain since July 2013. Conventional crude oil (+15.8%) was largely responsible for the increase in this commodity group. On a year-over-year basis, the RMPI excluding crude energy products was up 2.6%.
To a lesser extent, animals and animal products (+10.4%) also contributed to the year-over-year gain of the RMPI, primarily as a result of higher prices for live animals (+17.2%), particularly hogs (+21.7%) and cattle and calves (+21.5%). On a year-over-year basis, animal prices have been on an upward trend since April 2013.
Prices for logs, pulpwood, natural rubber and other forestry products (+5.0%) as well as metal ores, concentrates and scrap (+0.4%) were also up compared with June 2013.
The 12-month increase in the RMPI was moderated slightly by lower prices for crop products (-5.7%), which have been decreasing since July 2013. Other crop products (-6.6%), canola (-19.8%) and wheat (-11.6%) were responsible for the decline in crop products.
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. However, 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.
Table CANSIM table329-0074: Industrial Product Price Index, by major commodity aggregations.
Table CANSIM table329-0075: Industrial Product Price Index, by commodity.
Table CANSIM table329-0076: Industrial Product Price Index, for selected groups, by region.
Table CANSIM table329-0077: Industrial Product Price Index, by North American Industry Classification System.
Table CANSIM table330-0008: Raw Materials Price Index, by commodity.
Definitions, data sources and methods: survey numbers survey number2306 and survey number2318.
The industrial product and raw materials price indexes for July will be released on August 29.
Contact information
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