Industrial product and raw materials price indexes, November 2015
The Industrial Product Price Index (IPPI) declined 0.2% in November, mainly as a result of lower prices for primary non-ferrous metal products. The Raw Materials Price Index (RMPI) fell 4.0%, led by lower prices for crude energy products.
Industrial Product Price Index, monthly change
The IPPI declined for the fourth consecutive month, falling 0.2% in November. Among the 21 major commodity groups, 11 were up, 8 were down and 2 were unchanged.
The decline in the IPPI in November was mainly attributable to lower prices for primary non-ferrous metal products (-3.5%), which posted their largest decline since April 2013. Unwrought precious metals and precious metal alloys (-5.0%), specifically unwrought silver and silver alloys (-7.1%) and unwrought gold and gold alloys (-5.2%), were the main reasons for the decline in prices for primary non-ferrous metals. To a lesser extent, lower prices for unwrought copper and copper alloys (-4.3%) and unwrought aluminum and aluminum alloys (-3.0%) also put downward pressure on the commodity group.
Meat, fish, and dairy products (-1.5%) recorded their largest decline since September 2008, primarily because of lower prices for fresh and frozen pork (-3.9%), fresh and frozen poultry of all types (-3.2%) as well as processed meat products, other meats and animal by-products (-2.2%). The drop in prices for fresh and frozen pork coincided with a 15.2% decline in the price for hogs in November.
Also contributing to the decline in the IPPI in November was energy and petroleum products (-0.4%). Lower prices for asphalt (except natural) and asphalt products (-4.6%), motor gasoline (-1.2%), heavy fuel oils (-3.0%), and jet fuel (-3.6%) were the main reasons for the decline, while higher prices for diesel fuel (+1.9%) and light fuel oils (+1.9%) moderated the drop. The IPPI excluding energy and petroleum products declined 0.2% in November.
Also contributing to the decline, but to a lesser extent, were lower prices for fruit, vegetables, feed, and other food products (-0.4%), specifically other animal feed (-2.5%) as well as flour and other grain mill products (-3.4%).
Largely moderating the decline in the IPPI in November were higher prices for motorized and recreational vehicles (+1.2%), specifically passenger cars and light trucks (+1.3%), motor vehicle engines and motor vehicle parts (+0.8%) and aircraft (+1.5%). Higher prices for motorized and recreational vehicles were closely linked to the depreciation of the Canadian dollar relative to the US dollar.
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 October to November 2015, the Canadian dollar depreciated 1.6% relative to the US dollar. If the exchange rate had remained constant, the IPPI would have fallen 0.5% instead of decreasing 0.2%.
Industrial Product Price Index, 12-month change
The IPPI declined 0.2% over the 12-month period ending in November, after decreasing 0.4% in October.
The main reason for the year-over-year decline in the IPPI in November was energy and petroleum products (-19.8%), specifically lower prices for motor gasoline (-14.3%), diesel fuel (-22.5%), light fuel oils (-21.1%) and heavy fuel oils (-37.3%). The IPPI excluding energy and petroleum products increased 3.3% in November.
Also contributing to the decline in the IPPI was chemicals and chemical products (-2.4%), led by lower prices for petrochemicals (-19.6%). Conversely, higher prices for ammonia and chemical fertilizers (+9.9%) and chemical products, not elsewhere classified (+5.5%) moderated the decline in the commodity group.
Higher prices for motorized and recreational vehicles (+11.5%), specifically passenger cars and light trucks (+12.8%), motor vehicle engines and motor vehicle parts (+7.0%) as well as aircraft (+18.0%), largely moderated the year-over-year decline in the IPPI.
Also moderating the decline in the IPPI were higher prices for electrical, electronic, audiovisual and telecommunication products (+6.0%).
Raw Materials Price Index, monthly change
The RMPI declined 4.0% in November after posting no change in October. Of the six major commodity groups, two were up and four were down.
Lower prices for crude energy products (-5.7%) were the main reason for the decline in the RMPI, specifically conventional crude oil (-6.0%). The RMPI excluding crude energy products fell 2.8% in November.
Also contributing to the decline in the RMPI were lower prices for animals and animal products (-4.4%), specifically hogs (-15.2%) and, to a lesser extent, cattle and calves (-3.6%).
Prices for metal ores, concentrates and scrap declined 3.9% in November. This was the largest decline for this commodity group since April 2013 when prices fell 8.2%.
Raw Materials Price Index, 12-month change
The RMPI declined 16.3% over the 12-month period ending in November.
Lower prices for crude energy products (-29.5%) were largely responsible for the decrease, specifically conventional crude oil (-30.3%). The RMPI excluding crude energy products declined 4.7% from the same month last year.
Prices for animals and animal products (-7.4%) also contributed to the decline in the RMPI, specifically hogs (-19.8%) and cattle and calves (-8.8%).
Also contributing to the year-over-year decline in the RMPI was metal ores, concentrates and scrap (-8.9%), which posted its 12th consecutive year-over-year decline and its largest drop since February 2014.
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. 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.
Real-time CANSIM tables
The industrial product and raw materials price indexes for December 2015 will be released on January 29, 2016.
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; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).
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