Industrial product and raw materials price indexes, December 2017
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Released: 2018-01-31
December 2017
-0.1% 
(monthly change)
December 2017
0.0%
(monthly change)
December 2017
-0.9%
(monthly change)
December 2017
0.0%
(monthly change)
Prices for products sold by Canadian manufacturers, as measured by the Industrial Product Price Index (IPPI), edged down 0.1% in December, mainly due to lower prices for energy and petroleum products and primary non-ferrous metal products. Prices for raw materials purchased by Canadian manufacturers, as measured by the Raw Materials Price Index (RMPI), decreased 0.9%, primarily due to lower prices for crude energy products.
Chart 1
Prices for industrial goods decrease
Industrial Product Price Index, monthly change
The IPPI edged down 0.1% in December, following a 1.4% increase in November. Of the 21 major commodity groups, 9 were down, 8 were up and 4 were unchanged.
The decline in the IPPI was largely attributable to lower prices for energy and petroleum products (-0.7%) and primary non-ferrous metal products (-1.2%).
Energy and petroleum product prices declined for the first time since June 2017, mainly due to lower prices for motor gasoline (-3.4%) and, to a lesser extent, lubricants and other petroleum refinery (-2.0%) products. Conversely, prices for light fuel oils (+1.6%), diesel fuel (+1.0%) and jet fuel (+3.7%) increased in December. The IPPI excluding energy and petroleum products was unchanged.
Unwrought precious metals and precious metal alloys (-2.8%) were the main contributor to the decrease in primary non-ferrous metal products, followed by unwrought aluminum and aluminum alloys (-1.8%). Within the unwrought precious metals and precious metal alloys group, unwrought silver and silver alloys (-5.2%), other unwrought precious metals and precious metal alloys (including platinum group metals) (-2.3%) and unwrought gold and gold alloys (-1.6%) all contributed to the decrease.
To a lesser extent, lower prices for meat, fish and dairy products (-0.4%) also contributed to the decrease in the IPPI. Lower prices for fresh and frozen beef and veal (-1.1%) were mainly responsible for the decline in this product group.
The decline in the IPPI was primarily moderated by higher prices for chemicals and chemical products (+0.8%). Petrochemicals (+2.3%) and ammonia and chemical fertilizers (+3.2%) were the main contributors to the increase in this product group.
Higher prices for pulp and paper products (+1.5%) also moderated the decline in the IPPI, mainly due to wood pulp (+3.8%).
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. However, from November to December, the value of the Canadian dollar relative to the US dollar was unchanged.
Industrial Product Price Index, 12-month change
The IPPI rose 2.2% over the 12-month period ending in December, after increasing 2.7% in November.
Compared with December 2016, the increase in the IPPI in December was largely due to higher prices for energy and petroleum products (+11.2%). Motor gasoline (+10.1%), light fuel oils (+15.1%) and diesel fuel (+13.6%) were the main contributors to the increase in this product group. Year over year, the IPPI excluding energy and petroleum products rose 0.9%.
Primary non-ferrous metal products (+5.1%) posted a fifth consecutive year-over-year gain in December. The increase in this product group was mainly due to higher prices for unwrought copper and copper alloys (+15.0%), unwrought aluminum and aluminum alloys (+13.1%) and other unwrought non-ferrous metals and non-ferrous metal alloys (+11.6%). These gains were moderated by lower prices for unwrought precious metals and precious metal alloys (-1.9%).
Prices for pulp and paper products (+7.3%) also increased compared with December 2016, mainly due to higher prices for wood pulp (+21.7%).
Meat, fish and dairy products (+3.6%) also rose year over year in December, led by fresh and frozen pork (+14.0%) and fresh and frozen beef and veal (+8.2%).
The year-over-year increase in the IPPI was primarily moderated by lower prices for motorized and recreational vehicles (-3.6%), particularly passenger cars and light trucks (-4.7%) and, to a lesser extent, motor vehicle engines and motor vehicle parts (-2.2%).
Raw Materials Price Index, monthly change
The RMPI decreased 0.9% in December, following a 5.4% increase in November. Of the six major commodity groups, four were down and two were up.
Chart 2
Prices for raw materials decrease
The decrease in the RMPI was mainly due to lower prices for crude energy products (-1.8%), specifically conventional crude oil (-2.0%), which posted its first decrease since July 2017. Canadian refiners paid less for conventional crude oil in December after supplies of Canadian crude oil increased due to the Keystone pipeline shutdown in November. The RMPI excluding crude energy products was unchanged.
To a lesser extent, prices for crop products (-0.4%) also contributed to the decrease in the RMPI. The decrease in this product group was mainly attributable to lower prices for canola (including rapeseed) (-2.3%), cocoa beans (-9.9%) and oats (-4.2%).
Higher prices for logs, pulpwood, natural rubber and other forestry products (+1.7%) moderated the decrease in the RMPI.
Raw Materials Price Index, 12-month change
The RMPI rose 6.2% year over year in December, following a 13.9% gain in November.
Compared with December 2016, the increase in the RMPI in December was mainly due to higher prices for crude energy products (+7.8%), particularly conventional crude oil (+7.9%). Year over year, the RMPI excluding crude energy products rose 4.9%.
Prices for metal ores, concentrates and scrap increased 8.8% compared with December 2016, continuing an upward trend that began in July 2016.
Prices for animals and animal products (+4.9%) also rose year over year. Prices for hogs (+14.7%) and, to a lesser extent, cattle and calves (+4.2%) and fish, shellfish and other fishery products (+9.2%) were largely responsible for the gain in animals and animal products.
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
The publication "A Historical Timeline of Canadian Producer Price Statistics," which is part of the Prices Analytical Series (62F0014M), 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 February 12, 2018. For more information, consult the document Real-time CANSIM tables.
Next release
The industrial product and raw materials price indexes for January 2018 will be released on February 28.
Products
The publication "A Historical Timeline of Canadian Producer Price Statistics," which is part of the Prices Analytical Series (62F0014M), is now available online.
Contact information
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