Industrial product and raw materials price indexes, February 2017
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Released: 2017-03-30
February 2017
0.1% 
(monthly change)
February 2017
0.3%
(monthly change)
February 2017
1.2%
(monthly change)
February 2017
1.6%
(monthly change)
The Industrial Product Price Index (IPPI) edged up 0.1% in February, primarily due to higher prices for meat, fish and dairy products and primary non-ferrous metal products. The Raw Materials Price Index (RMPI) increased 1.2%, mainly as a result of higher prices for animals and animal products.
Chart 1
Prices for industrial goods edge up
Industrial Product Price Index, monthly change
The IPPI (+0.1%) increased for a sixth consecutive month in February, following a 0.6% gain the previous month. Of the 21 major commodity groups, 8 were up, 10 were down and 3 were unchanged.
The growth in the IPPI was largely attributable to higher prices for meat, fish and dairy products (+1.5%) and primary non-ferrous metal products (+1.5%).
Higher prices for fresh and frozen pork (+7.3%) and processed meat products, other meats and animal by-products (+3.2%) were the main contributors to the gain in the meat, fish and dairy products group. The increase in this commodity group was slightly moderated by lower prices for fresh and frozen beef and veal (-1.0%).
The increase in the primary non-ferrous metal products group (+1.5%) was mainly attributable to higher prices for unwrought precious metals and precious metal alloys (+1.5%), unwrought aluminum and aluminum alloys (+2.8%) and unwrought copper and copper alloys (+2.9%).
The growth in the IPPI was primarily moderated by energy and petroleum products (-0.7%). Lower prices for motor gasoline (-3.2%) and, to a lesser extent, natural gas liquids and related products (-16.3%) were the main contributors to the decline. Higher prices for lubricants and other petroleum refinery products (+5.6%) and asphalt (other than natural) and asphalt products (+2.3%) offset lower prices for energy and petroleum products. The IPPI excluding energy and petroleum products rose 0.3%.
Prices for motorized and recreational vehicles (-0.4%) decreased for a third consecutive month in February. Lower prices for passenger cars and light trucks (-0.5%), motor vehicle engines and motor vehicle parts (-0.3%) and aircraft (-0.5%) were mainly responsible for the decline in this commodity group. The lower prices for motorized and recreational vehicles were closely linked to the appreciation of the Canadian dollar relative to the US dollar.
Some IPPI prices are reported in US dollars and 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 January to February, the Canadian dollar rose 0.6% relative to the US dollar. If the exchange rate had remained constant, the IPPI would have advanced 0.2% instead of 0.1%.
Industrial Product Price Index, 12-month change
The IPPI rose 3.5% over the 12-month period ending in February, after increasing 2.5% in January. This was the strongest year-over-year increase since April 2014.
The increase in the IPPI compared with February 2016 was mostly attributable to higher prices for energy and petroleum products (+26.9%), which posted their strongest year-over-year increase since October 2011. Motor gasoline (+28.9%), light fuel oil (+34.8%) and, to a lesser extent, diesel fuel (+26.4%) were the primary contributors to the rise in this commodity group. The IPPI excluding energy and petroleum products was up 0.8% on a year-over-year basis.
Compared with February 2016, primary non-ferrous metal products (+7.9%) also contributed to the increase of the IPPI, albeit to a lesser extent. Higher prices for other unwrought non-ferrous metals and non-ferrous metal alloys (+29.8%) and unwrought copper and copper alloys (+23.5%) led the gain in this commodity group. Unwrought precious metals and precious metal alloys (+2.4%) and unwrought aluminum and aluminum alloys (+7.0%) were also up compared with the same month a year earlier.
Year over year, chemicals and chemical products rose 5.2%, primarily due to higher prices for petrochemicals (+28.4%), particularly aromatic hydrocarbon gases (+39.9%) and liquefied refinery gases, and acyclic hydrocarbons not elsewhere classified (+26.2%). Prices for basic chemicals (+6.2%) and plastic resins (+4.6%) also exerted upward pressure on this group.
The year-over-year increase in the IPPI was mainly offset by lower prices for motorized and recreational vehicles (-3.2%), particularly passenger cars and light trucks (-3.4%) and, to a lesser extent, motor vehicle engines and motor vehicle parts (-2.3%) and aircraft (-4.2%).
In celebration of the country's 150th birthday, Statistics Canada is presenting snapshots from our rich statistical history.
In February 2017, year-over-year prices for conventional crude oil rose by more than 60% for the second consecutive month. Today, we look back at the greatest year-over-year growth in conventional crude oil as measured by the RMPI since the index began in 1981.
Partly coinciding with an economic crisis in Asia, conventional crude oil prices declined through much of 1997 and 1998, reaching their lowest point in February 1999. From December 1996 to February 1999, conventional crude oil prices fell 49.5%.
In the following months, prices started to grow again. By the summer of 1999, prices had returned to pre-crisis levels. In the 12 months to February 2000, prices rose 153.1%, the largest year-over-year increase ever recorded for the conventional crude oil index.
Raw Materials Price Index, monthly change
The RMPI was up 1.2% in February, following a 1.7% increase in January. Of the six major commodity groups, five were up and one was down.
Chart 2
Prices for raw materials increase
Animals and animal products (+2.9%) were the main contributors to the gain in the RMPI. Prices for live animals (+5.0%), particularly hogs (+16.3%), were largely responsible for the rise in this commodity group. After declining 39.4% from June to November 2016, prices for hogs began increasing in December. Lower prices for cattle and calves (-1.0%) slightly offset the advance in animals and animal products.
Metal ores, concentrates and scrap also significantly contributed to the growth in the RMPI in February, with prices rising 1.8% following a 1.5% increase the previous month.
Crude energy products (+0.8%) posted a third consecutive monthly increase in February. The gain in this commodity group was mainly attributable to higher prices for conventional crude oil (+0.8%). The RMPI excluding crude energy products was up 1.6%.
Raw Materials Price Index, 12-month change
The RMPI rose 23.7% in the 12-month period ending in February, following a 23.0% increase in January. This was the strongest year-over-year gain in the RMPI since July 2011.
Compared with February 2016, the advance of the RMPI was in large part due to higher prices for crude energy products (+60.8%), primarily conventional crude oil (+64.4%). The RMPI excluding crude energy products rose 5.5%.
To a lesser extent, metal ores, concentrates and scrap (+15.0%) also contributed to the year-over-year increase in the IPPI, following a 17.5% gain in January.
Year over year, lower prices for animals and animal products (-1.0%) offset the growth in the RMPI. The decline in this commodity group was primarily due to lower prices for cattle and calves (-12.4%), but was offset by higher prices for hogs (+5.8%).
Note to readers
Starting with the collection of February 2017 data, the Industrial Product Price Index (IPPI) and Raw Materials Price Index (RMPI) program changed its data collection mode from a paper questionnaire to an electronic questionnaire. The redesigned questionnaire collects additional information on product classification or NAPCS (North American Product Classification System), geography, product characteristics, selling or purchase price, reasons for price change as well as revenue and expenditure data.
The IPPI and 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), 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 April 10. For more information, consult the document Real-time CANSIM tables.
Next release
The industrial product and raw materials price indexes for March will be released on April 28.
Contact information
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