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Industrial product and raw materials price indexes, October 2017

Released: 2017-11-28

Prices for products sold by Canadian manufacturers, as measured by the Industrial Product Price Index (IPPI), rose 1.0% in October, mainly due to higher prices for motorized and recreational vehicles. Prices for raw materials purchased by Canadian manufacturers, as measured by the Raw Materials Price Index (RMPI), increased 3.8%, primarily due to higher prices for crude energy products.

Chart 1  Chart 1: Prices for industrial goods increase
Prices for industrial goods increase

Industrial Product Price Index, monthly change

The IPPI increased 1.0% in October, following a 0.3% decrease in September. Of the 21 major commodity groups, 18 were up, 1 was down and 2 were unchanged.

The growth in the IPPI was largely attributable to higher prices for motorized and recreational vehicles (+1.5%). The increase in this product group was mainly the result of higher prices for passenger cars and light trucks (+1.2%), motor vehicle engines and motor vehicle parts (+1.5%) and aircraft (+2.7%). The increase in prices for motorized and recreational vehicles was closely linked to the depreciation of the Canadian dollar relative to the US dollar.

Higher prices for energy and petroleum products (+1.5%) also contributed significantly to the increase in the IPPI. Light fuel oils (+6.5%) and diesel fuel (+5.1%) were the main contributors to the increase in this product group, while lower prices for motor gasoline (-2.2%) moderated the gain. The IPPI excluding energy and petroleum products rose 0.9%.

Prices for primary non-ferrous metal products (+2.1%) also increased in October. Unwrought copper and copper alloys (+5.9%) and unwrought aluminum and aluminum alloys (+5.2%) were the largest contributors to the gain in this product group. Other unwrought non-ferrous metals and non-ferrous metal alloys (+3.3%) also contributed to the advance.

Higher prices for chemicals and chemical products (+1.6%) and electrical, electronic, audiovisual and telecommunication products (+1.4%) also contributed to the increase in the IPPI, but to a lesser extent.

The increase in chemicals and chemical products was mainly due to higher prices for liquefied refinery gases, and acyclic hydrocarbons not elsewhere classified (+20.5%).

Higher prices for electronic and electrical parts (+1.8%) and communication and audio and video equipment (+1.2%) were mainly responsible for the increase in the electrical, electronic, audiovisual and telecommunication products group.

The increase in the IPPI was moderated by lower prices for meat, fish and dairy products (-0.7%). Lower prices for fresh and frozen pork (-2.2%) and processed meat products, other meats and animal by-products (-2.6%) led the decline in this product group. Conversely, prices for fresh and frozen beef and veal increased 1.3% in October.

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 September to October, the Canadian dollar depreciated 2.6% relative to the US dollar. If the exchange rate had remained constant, the IPPI would have increased 0.4% instead of 1.0%.

Industrial Product Price Index, 12-month change

The IPPI rose 1.8% over the 12-month period ending in October, after increasing 1.5% in September.

Compared with October 2016, the increase in the IPPI in October was largely due to higher prices for energy and petroleum products (+8.8%), which posted an 11th consecutive year-over-year gain. The increase in this commodity group was mainly attributable to higher prices for motor gasoline (+6.9%). Light fuel oils (+10.0%), diesel fuel (+9.7%) and lubricants and other petroleum refinery products (+12.1%) also contributed to the gain. Year over year, the IPPI excluding energy and petroleum products rose 0.7%.

Higher prices for primary non-ferrous metal products (+6.2%) also contributed to the year-over-year increase in the IPPI. Unwrought copper and copper alloys (+36.7%) was the largest contributor to the gain in this product group. Other unwrought non-ferrous metals and non-ferrous metal alloys (+18.7%) and unwrought aluminum and aluminum alloys (+16.6%) also contributed to the advance.

Prices for pulp and paper products were up 5.1% compared with October 2016. The increase in this product group was primarily due to higher prices for wood pulp (+13.5%).

To a lesser extent, primary ferrous metal products (+5.0%) and lumber and other wood products (+5.7%) also contributed to the year-over-year increase in the IPPI.

Lower prices for motorized and recreational vehicles (-3.6%) 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 (-4.6%) and, to a lesser extent, motor vehicle engines and motor vehicle parts (-2.0%).

Telling Canada's story in numbers; #ByTheNumbers

In celebration of the country's 150th birthday, Statistics Canada is presenting snapshots from our rich statistical history.

Over the past 25 years, the total Industrial Product Price Index has increased by 55.5%. In comparison, prices for clothing, footwear and accessories and textile and leather products have experienced slower growth. From 1992 to 2016, these two product groups rose by 19.2% and 24.2% respectively.

Following the reduction of trade barriers, Canadian imports of textiles and textile articles have shifted towards lesser developed countries. For example, Bangladesh accounted for 0.6% of Canadian imports of textiles and textiles articles in 1992. By 2016, Bangladesh accounted for 8.7% of imports for this category.

Raw Materials Price Index, monthly change

The RMPI rose 3.8% in October, following a 0.2% decline the previous month. Of the six major commodity groups, five were up and one was down.

Chart 2  Chart 2: Prices for raw materials increase
Prices for raw materials increase

The increase in the RMPI was primarily due to higher prices for crude energy products (+6.9%), particularly conventional crude oil (+7.2%). The RMPI excluding crude energy products increased 1.7%.

Prices for metal ores, concentrates and scrap (+3.7%) also contributed significantly to the increase in the RMPI.

Crop products (+1.1%) and animals and animal products (+0.3%) contributed to the increase in the RMPI as well, but to a lesser extent.

The increase in crop products was mainly attributable to higher prices for oats (+6.6%), wheat (+1.8%) and canola (including rapeseed) (+2.2%).

Cattle and calves (+3.0%) were the largest contributor to the increase in animals and animal products, while lower prices for hogs (-2.1%) moderated the gain.

Raw Materials Price Index, 12-month change

The RMPI increased 6.6% in the 12-month period ending in October, following a 6.2% increase in September.

Compared with October 2016, the increase in the RMPI in October was primarily due to higher prices for metal ores, concentrates and scrap (+14.5%).

Higher prices for crude energy products (+5.6%) also contributed to the year-over-year increase in the RMPI. The increase in this product group was mainly attributable to conventional crude oil (+5.8%). Year over year, the RMPI excluding crude energy products rose 7.5%.

To a lesser extent, animals and animal products (+5.5%) also contributed to the gain in the RMPI, mainly due to higher prices for hogs (+13.6%), fish, shellfish and other fishery products (+17.3%) and cattle and calves (+5.2%).



  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 (Catalogue number11-627-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 (Catalogue number11-627-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 December 4. For more information, consult the document Real-time CANSIM tables.

Next release

The industrial product and raw materials price indexes for November 2017 will be released on January 4, 2018.

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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