Industrial product and raw materials price indexes, September 2016
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Released: 2016-10-31
September 2016
0.4% 
(monthly change)
September 2016
0.3%
(monthly change)
September 2016
-0.1% 
(monthly change)
September 2016
-1.6%
(monthly change)
The Industrial Product Price Index (IPPI) rose 0.4% in September, led by higher prices for energy and petroleum products, as well as motorized and recreational vehicles. The Raw Materials Price Index (RMPI) edged down 0.1%, as lower prices for animals and animal products were largely offset by higher prices for crude energy products.
Chart 1
Prices for industrial goods increase
Industrial Product Price Index, monthly change
The IPPI rose 0.4% in September, after falling 0.4% in August. Of the 21 major commodity groups, 15 were up, 5 were down, and 1 was unchanged.
Higher prices for energy and petroleum products (+0.9%) in September largely contributed to the increase in the IPPI. The gain in this commodity group was primarily attributable to higher prices for light fuel oils (+2.6%), motor gasoline (+0.7%), and, to a lesser extent, heavy fuel oils (+3.3%), jet fuel (+3.5%), and diesel fuel (+0.9%). Moderating the rise in energy and petroleum products were lower prices for asphalt (except natural) (-6.3%). The IPPI excluding energy and petroleum products rose 0.3%.
Also contributing to the increase in the IPPI were higher prices for motorized and recreational vehicles (+0.6%), specifically passenger cars and light trucks (+0.6%), motor vehicle engines and motor vehicle parts (+0.4%), as well as aircraft (+0.9%). Higher prices for motorized and recreational vehicles were closely linked to the depreciation of the Canadian dollar relative to the US dollar.
Chemicals and chemical products (+1.0%) also rose in September, led by higher prices for petrochemicals (+3.8%) and other basic inorganic chemicals (+2.4%).
Moderating the increase in the IPPI were lower prices for fruit, vegetables, feed and other food products (-0.3%), and meat, fish and dairy products (-0.1%).
Lower prices for other animal feed (-2.9%), flour and other grain mill products (-2.8%), and, to a lesser extent, grain and oilseed products (not elsewhere classified) (-0.3%) were the main reasons for the decline in fruit, vegetables, feed and other food products. The decrease in prices for meat, fish and dairy products was primarily attributable to lower prices for fresh and frozen pork (-3.3%), while higher prices for fresh and frozen beef and veal (+1.1%), and fresh and frozen poultry of all types (+1.2%) moderated the fall in the commodity group.
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 August to September, the Canadian dollar depreciated 0.9% relative to the US dollar. If the exchange rate had remained constant, the IPPI would have increased 0.2% instead of rising 0.4%.
Industrial Product Price Index, 12-month change
The IPPI declined 0.5% over the 12-month period ending in September, after falling 1.3% in August.
The year-over-year decrease in the IPPI in August was largely attributable to lower prices for energy and petroleum products (-5.1%). Motor gasoline (-4.9%) and diesel fuel (-6.0%) were the main reasons for the decline in this commodity group. The IPPI excluding energy and petroleum products rose 0.2% in September.
Also contributing to the decline were lower prices for meat, fish, and dairy products (-3.7%), specifically fresh and frozen beef and veal (-14.6%), and, to a lesser extent, fresh and frozen pork (-5.0%). Moderating the year-over-year decline in meat, fish, and dairy products were higher prices for dairy products (+2.7%), specifically cheese and cheese products (+4.0%), and fluid milk and processed milk products (+3.3%).
Prices for chemicals and chemical products (-2.1%) also fell in September, mainly because of lower prices for ammonia and chemical fertilizers (-19.2%), and plastic resins (-5.5%).
Moderating the year-over-year decline in the IPPI were higher prices for primary non-ferrous metal products (+5.6%), which were mainly attributable to unwrought precious metals and precious metal alloys (+17.9%). Lower prices for unwrought copper and copper alloys (-10.6%) moderated the gain in the commodity group.
Raw Materials Price Index, monthly change
The RMPI edged down 0.1% in September, after declining 0.7% in August. Of the six major commodity groups, three were up, and three were down.
Chart 2
Prices for raw materials edge down
The decline in the RMPI was led by lower prices for animals and animal products (-3.7%), specifically cattle and calves (-7.8%), and hogs (-9.1%).
Largely offsetting the decline in animals and animal products were higher prices for crude energy products (+2.4%), led by an increase in conventional crude oil (+2.4%). The RMPI excluding crude energy products decreased 1.6%.
Prices for crop products (-0.9%) fell in September, mainly as a result of oilseeds (except canola) (-3.2%), grains (except wheat) (-0.5%), and canola (including rapeseed) (-1.7%).
Prices for metal ores, concentrates and scrap fell 0.7%.
Raw Materials Price Index, 12-month change
After posting the first year-over-year gain since July 2014 in August, the RMPI fell 1.9% in September.
The decline was led by lower prices for animals and animal products (-11.3%), specifically cattle and calves (-28.2%), and, to a lesser extent, hogs (-18.4%).
Year over year, prices for crop products (-3.5%) also fell in September, led by other crop products (-3.7%), wheat (-9.6%) and canola (including rapeseed) (-6.4%). Higher prices for fresh potatoes (+17.7%) tempered the decrease.
Moderating the decline in the RMPI were higher prices for metal ores, concentrates and scrap (+4.5%).
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 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 available in CANSIM 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 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 November 7. For more information, consult the document Real-time CANSIM tables.
Next release
The industrial product and raw materials price indexes for October will be released on November 30.
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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