Industrial product and raw materials price indexes, April 2015
The Industrial Product Price Index (IPPI) declined 0.9% in April, mainly because of lower prices for energy and petroleum products. The Raw Materials Price Index (RMPI) increased 3.8%, largely as a result of higher prices for crude energy products.
Industrial Product Price Index, monthly change
The IPPI declined 0.9% in April, following a 0.2% increase in March. Of the 21 commodity groups, 17 were down, 2 were up and 2 were unchanged.
The main reason for the decline in April was lower prices for energy and petroleum products (-3.2%). The decline was led by lower prices for diesel fuel (-8.7%) and light fuel oils (-5.6%), while motor gasoline edged down 0.6%. Both motor gasoline and diesel fuel are commonly used as transportation fuels; however, prices for diesel fuel may vary as it is also used as a heating fuel. The demand for diesel fuel typically declines outside winter months, which can put downward pressure on prices. The IPPI excluding energy and petroleum products declined 0.6%. This was the first decrease in the IPPI excluding energy and petroleum products since May 2014.
Motorized and recreational vehicles (-1.5%) also contributed to the decline in the IPPI. Lower prices for passenger cars and light trucks (-1.5%) were the main reason for the decrease and, to a lesser extent, lower prices for motor vehicle engines and motor vehicle parts (-1.2%) as well as aircraft (-2.3%). Lower prices for motorized and recreational vehicles were closely linked to the appreciation of the Canadian dollar relative to the US dollar.
Both primary non-ferrous metal products (-0.8%) and primary ferrous metal products (-1.4%) declined in April.
Lower prices for unwrought precious metals and precious metal alloys (-0.7%), and other unwrought non-ferrous metals and non-ferrous metal alloys (-2.2%) were the main reasons for the decline in primary non-ferrous metal products. Lower prices for basic and semi-finished iron and steel products (-1.4%) led the decline in primary ferrous metal products.
To a lesser extent, lower prices for fruit, vegetables, feed and other food products (-0.6%) also contributed to the decline in the IPPI. The decrease was led by lower prices for flour and other grain mill products (-3.2%), grain and oilseed products, not elsewhere classified (-0.8%) as well as other animal feed (-1.3%).
Some IPPI prices are reported in US dollars and are converted to Canadian dollars using the average monthly exchange rate. Consequently, any change in the value of the Canadian dollar relative to the US dollar will affect the level of the index. From March to April 2015, the Canadian dollar appreciated 2.3% relative to the US dollar. This was the first appreciation of the Canadian dollar since July 2014. If the exchange rate had remained constant, the IPPI would have declined 0.4% instead of decreasing 0.9%.
Industrial Product Price Index, 12-month change
The IPPI declined 2.4% over the 12-month period ending in April, after falling 1.8% in March.
Compared with April 2014, the decline in the IPPI was largely a result of lower prices for energy and petroleum products (-25.8%). Motor gasoline (-27.1%) and, to a lesser extent, diesel fuel (-28.7%) as well as light fuel oils (-23.1%), were the primary reasons for the decline in this commodity group. Excluding energy and petroleum products, the IPPI increased 2.4% over the last 12 months.
Also contributing to the decline were lower prices for chemicals and chemical products (-6.5%). The decrease in this commodity group was led by aromatic hydrocarbon gases (-31.9%), as well as liquefied refinery gases, and acyclic hydrocarbons not elsewhere classified (-29.8%).
The year-over-year decline in the IPPI was moderated by a gain in motorized and recreational vehicles (+8.7%). The increase was mainly due to higher prices for passenger cars and light trucks (+9.2%) and, to a lesser extent, motor vehicle engines and motor vehicle parts (+6.2%) and aircraft (+13.7%).
Also moderating the year-over-year decline in the IPPI were higher prices for primary non-ferrous metal products (+3.3%), specifically, aluminum and aluminum-alloy basic and semi-finished products (+15.8%) and unwrought aluminum and aluminum alloys (+9.0%).
Raw Materials Price Index, monthly change
The RMPI rose 3.8% in April, following a 1.5% decline in March. Of the six commodity groups, two were up, three were down and one was unchanged.
The gain was attributable to higher prices for crude energy products (+9.9%), specifically conventional crude oil (+10.3%). The RMPI excluding crude energy products declined 0.3%.
Lower prices for crop products (-1.5%) moderated the increase, mainly other crop products (-1.9%) and, to a lesser extent, wheat (-2.2%).
Metal ores, concentrates and scrap was unchanged in April despite a 12.4% decline in prices for iron ores and concentrates. Prices for iron ores and concentrates have generally declined for over a year and have fallen 55.7% since December 2013.
Raw Materials Price Index, 12-month change
The RMPI fell 20.9% in the 12-month period ending in April, following a 23.7% decline in March.
The decrease was largely attributable to crude energy products (-36.7%), specifically conventional crude oil (-37.4%). The RMPI excluding crude energy products declined 2.8% from the same period last year.
Also contributing to the decline, but to a much lesser extent, was metal ores, concentrates and scrap (-3.1%).
Note to readers
The Industrial Product Price Index (IPPI) and Raw Materials Price Index (RMPI) are available at the Canada level only. Selected commodity groups within the IPPI are also available by region.
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. 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 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 May will be released on June 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).
- Date modified: