Industrial product and raw materials price indexes, March 2016
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Released: 2016-04-29
March 2016
-0.6% 
(monthly change)
March 2016
-1.3%
(monthly change)
March 2016
4.5% 
(monthly change)
March 2016
-0.3%
(monthly change)
The Industrial Product Price Index (IPPI) declined 0.6% in March. The decline was led by lower prices for motorized and recreational vehicles, while higher prices for energy and petroleum products largely moderated the fall. The Raw Materials Price Index (RMPI) increased 4.5%, led by higher prices for crude energy products.
Chart 1
Prices for industrial goods decline
Industrial Product Price Index, monthly change
The IPPI declined 0.6% in March, after falling 1.0% in February. Of the 21 major commodity groups, 18 were down and 3 were up.
The motorized and recreational vehicles commodity group (-2.9%) was the main reason for the decline in the IPPI in March. Lower prices for passenger cars and light trucks (-3.0%), motor vehicle engines and motor vehicle parts (-2.1%), and aircraft (-3.9%) were the main reasons for the decline in this commodity group. Lower prices for motorized and recreational vehicles were closely linked to the appreciation of the Canadian dollar relative to the US dollar.
Prices for meat, fish, and dairy products (-1.2%) also declined, led by lower prices for fresh and frozen beef and veal (-4.3%) and fresh and frozen pork (-2.3%). Fresh and frozen beef and veal posted their largest decline since July 2012, when prices fell 5.4%.
Also contributing to the decline in the IPPI were lower prices for primary non-ferrous metal products (-1.1%). Lower prices for unwrought aluminum and aluminum alloys (-3.7%), unwrought precious metals and precious metal alloys (-0.8%), and other unwrought non-ferrous metals and non-ferrous metal alloys (-2.9%) were the main reasons for the decline. Higher prices for unwrought copper and copper alloys (+2.9%) helped moderate the fall in this commodity group.
Largely moderating the decline in the IPPI were higher prices for energy and petroleum products (+5.2%). The increase was led by prices for motor gasoline (+10.9%), which posted their largest gain since February 2015, when prices rose 13.2%. To a lesser extent, light fuel oils (+5.5%) and diesel fuel (+3.5%) also contributed to the increase in March. The IPPI excluding energy and petroleum products posted its largest decline since May 2009, falling 1.3% in March.
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 February to March 2016, the Canadian dollar appreciated 4.1% relative to the US dollar. If the exchange rate had remained constant, the IPPI would have increased 0.3% instead of decreasing 0.6%.
Industrial Product Price Index, 12-month change
The IPPI declined 2.1% over the 12-month period ending in March, after declining 1.3% in February.
The main reason for the decline in the IPPI was lower prices year over year for energy and petroleum products (-18.8%). Motor gasoline (-15.0%), diesel fuel (-23.6%), light fuel oils (-22.0%) and heavy fuel oils (-32.9%) contributed to the decline in prices for energy and petroleum products. The IPPI excluding energy and petroleum products increased 0.5% from the same month last year.
Lower prices for both primary ferrous metal products (-11.9%) and primary non-ferrous metal products (-3.7%) also contributed to the year-over-year decline in the IPPI.
Lower prices for iron and steel basic shapes (-14.8%) and wire and other rolled and drawn steel products (-10.1%) were the main reasons for the decline in primary ferrous metal products. The decline in primary non-ferrous metal products was led by lower prices for unwrought copper and copper alloys (-12.8%), unwrought aluminum and aluminum alloys (-7.8%), and other unwrought non-ferrous metals and non-ferrous metal alloys (-7.1%).
Moderating the year-over-year decline in the IPPI were higher prices for motorized and recreational vehicles (+3.0%), specifically higher prices for passenger cars and light trucks (+4.0%) and aircraft (+5.2%).
Raw Materials Price Index, monthly change
The RMPI increased 4.5% in March, following a gain of 0.7% in February. Of the six major commodity groups, three were up and three were down.
Chart 2
Prices for raw materials increase
The increase in the RMPI was mainly attributable to higher prices for crude energy products (+14.3%), specifically conventional crude oil (+15.1%). The RMPI excluding crude energy products declined 0.3%.
Metal ores, concentrates and scrap (+0.7%) also contributed to the increase in the RMPI, but to a much lesser extent.
Slightly moderating the increase in the RMPI were lower prices for animals and animal products (-1.0%), specifically cattle and calves (-1.8%) and hogs (-2.5%).
Raw Materials Price Index, 12-month change
The RMPI declined 9.7% over the 12-month period ending in March.
Lower prices for crude energy products (-18.6%), specifically conventional crude oil (-19.2%), were largely responsible for the decrease. The RMPI excluding crude energy products declined 3.8% from the same month last year.
To a lesser extent, lower prices for animals and animal products (-5.5%) also contributed to the year-over-year decline in the RMPI. The decline in the animals and animal products commodity group was led by cattle and calves (-15.6%), while higher prices for hogs (+4.8%) moderated the fall.
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.
Infographic: Producer Price Indexes at a Glance
The infographic, "Producer Price Indexes at a Glance," which is part of Statistics Canada — Infographics (11-627-M), is now available. This infographic demonstrates how producer price indexes for goods and services are calculated and why they are important for the Canadian economy.
Real-time CANSIM tables
Real-time CANSIM table 329-8074 will be updated on May 6. For more information, consult the document Real-time CANSIM tables.
Next release
The industrial product and raw materials price indexes for April will be released on May 30.
Products
The infographic, "Producer Price Indexes at a Glance," which is part of Statistics Canada — Infographics (11-627-M), is now available from the Browse by key resource module of our website, under Publications.
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; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).
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