Industrial product and raw materials price indexes, August 2017
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Released: 2017-09-29
August 2017
0.3% 
(monthly change)
August 2017
-0.1% 
(monthly change)
August 2017
1.0%
(monthly change)
August 2017
-0.1%
(monthly change)
The Industrial Product Price Index (IPPI) rose 0.3% in August, mainly due to higher prices for energy and petroleum products. The Raw Materials Price Index (RMPI) increased 1.0%, primarily due to higher prices for crude energy products.
Chart 1
Prices for industrial goods increase
Industrial Product Price Index, monthly change
The IPPI increased 0.3% in August, following a 1.6% decrease in July. Of the 21 major commodity groups, 6 were up, 13 were down and 2 were unchanged.
The growth in the IPPI was mostly attributable to higher prices for energy and petroleum products (+2.8%). The gain in this commodity group was mainly due to higher prices for motor gasoline (+3.0%). Diesel fuel (+4.0%), light fuel oils (+3.7%) and jet fuel (+7.6%) also contributed to the increase, but to a lesser extent. Higher prices for energy and petroleum products coincided with August shutdowns of petroleum refineries and transportation hubs along the Gulf Coast of the United States in response to Hurricane Harvey. The IPPI excluding energy and petroleum products edged down 0.1%.
Higher prices for primary non-ferrous metal products (+2.7%) also contributed significantly to the increase in the IPPI. Unwrought precious metals and precious metal alloys (+3.2%) were the largest contributor to the price increases in this product group, followed by unwrought copper and copper alloys (+7.7%) and unwrought aluminum and aluminum alloys (+5.8%). Within the unwrought precious metals and precious metal alloys group, unwrought gold and gold alloys (+3.3%), other unwrought precious metals and precious metal alloys (including platinum group metals) (+2.9%) and unwrought silver and silver alloys (+3.4%) all contributed to the increase.
The increase in the IPPI was primarily moderated by lower prices for meat, fish and dairy products (-1.5%). Lower prices for fresh and frozen pork (-5.2%) led the decline in this product group. This was the largest decline in fresh and frozen pork since December 2016.
Lower prices for motorized and recreational vehicles (-0.5%) also moderated the increase in the IPPI. The decline in this group was mainly the result of lower prices for passenger cars and light trucks (-0.5%), motor vehicle engines and motor vehicle parts (-0.5%) and aircraft (-0.5%). The decrease in prices for motorized and recreational vehicles was closely linked to the appreciation of the Canadian dollar relative to the US dollar.
Prices for primary ferrous metal products (-2.0%) also fell in August. The decrease in this product group was mainly attributable to lower prices for wire and other rolled and drawn steel products (-5.4%).
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 July to August, the Canadian dollar appreciated 0.7% relative to the US dollar. If the exchange rate had remained constant, the IPPI would have increased 0.4% instead of 0.3%.
Industrial Product Price Index, 12-month change
The IPPI rose 1.9% over the 12-month period ending in August, after increasing 1.3% in July.
Compared with August 2016, the increase in the IPPI in August was largely due to higher prices for energy and petroleum products (+8.7%), which posted a ninth consecutive year-over-year increase. The increase in this commodity group was mainly attributable to higher prices for motor gasoline (+10.2%). Light fuel oil (+9.3%), diesel fuel (+8.8%) and heavy fuel oils (+13.1%) also contributed to the increase, but to a lesser extent.
The meat, fish and dairy products group (+3.8%) also exerted upward pressure on the IPPI, mainly due to higher prices for fresh and frozen pork (+8.6%). To a lesser extent, fresh and frozen beef and veal (+4.3%) and fresh and frozen poultry of all types (+3.8%) also contributed to the increase in meat, fish and dairy products.
Pulp and paper products (+6.1%) also rose compared to August 2016. The increase in this product group was primarily due to higher prices for wood pulp (+16.4%).
Lower prices for motorized and recreational vehicles (-2.3%) moderated the year-over-year gain in the IPPI. The decrease in motorized and recreational vehicles was mainly due to lower prices for passenger cars and light trucks (-3.0%) and, to a lesser extent, motor vehicle engines and motor vehicle parts (-1.3%).
In celebration of the country's 150th birthday, Statistics Canada is presenting snapshots from our rich statistical history.
Since 1981, the Industrial Product Price Index (IPPI) has measured factory gate price changes for major commodities sold by manufacturers in Canada.
Over the past 36 years, as more tobacco control initiatives were enacted and more people became aware of the health risks of smoking, demand for tobacco products has decreased. Nevertheless, from January 1981 to August 2017, the factory gate price of tobacco products, excluding taxes, increased 912% with an average annual growth rate of 6%. The Consumer Price Index, which measures final prices paid by consumers including taxes, saw price increases of 1,105% for tobacco products and smokers' supplies over the same period. Of all IPPI commodity groups, none saw price gains as continuously as that of tobacco products.
Since sales and excise taxes are not included in the IPPI, the increases in tobacco product producer prices cannot be explained by changes in taxes. Instead, it may reflect the industry's pricing strategy in response to a declining market size.
Chart 2
Tobacco Products Price Indexes
Raw Materials Price Index, monthly change
The RMPI rose 1.0% in August, following a 0.9% decline the previous month. Of the six major commodity groups, three were up and three were down.
Chart 3
Prices for raw materials increase
The increase in the RMPI was primarily due to higher prices for crude energy products (+3.0%), particularly conventional crude oil (+3.1%). The RMPI excluding crude energy products edged down 0.1%.
Higher prices for metal ores, concentrates and scrap (+3.7%) also contributed to the increase in the RMPI in August.
The growth in the RMPI was primarily moderated by lower prices for animals and animal products (-3.8%), mainly due to hogs (-9.9%) and cattle and calves (-5.5%).
Raw Materials Price Index, 12-month change
The RMPI increased 6.1% in the 12-month period ending in August, following a 4.2% increase in July.
Compared with August 2016, the increase in the RMPI in August was largely due to higher prices for crude energy products (+6.7%), mainly conventional crude oil (+6.7%).
Prices for metal ores, concentrates and scrap (+9.4%) also increased in August as prices rose year over year for the 14th consecutive month.
To a lesser extent, animals and animal products (+5.2%) also contributed to the gain in the RMPI, mainly due to higher prices for hogs (+17.8%) and fish, shellfish and other fishery products (+10.3%).
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 established by the Bank of Canada and available in CANSIM table 176-0081 (series v111666275). 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.
A Historical Timeline of Canadian Producer Price Statistics
To celebrate Canada 150, A Historical Timeline of Canadian Producer Price Statistics, which is part of Statistics Canada — Infographics (11-627-M), was created to showcase the key milestones in the history of Canadian producer price statistics. This historical timeline contains answers to questions such as: Who collected Canada's first statistics? What do Canadian producer price indexes measure?
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 October 10. For more information, consult the document Real-time CANSIM tables.
Next release
The industrial product and raw materials price indexes for September will be released on October 31.
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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