Industrial product and raw materials price indexes, February 2018
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Released: 2018-03-29
February 2018
0.1% 
(monthly change)
February 2018
0.3%
(monthly change)
February 2018
-0.3% 
(monthly change)
February 2018
0.9%
(monthly change)
Prices of products sold by Canadian manufacturers, as measured by the Industrial Product Price Index (IPPI), edged up 0.1% in February. Widespread price increases in the major commodity groups of the IPPI were largely offset by lower energy and petroleum product prices. Prices for raw materials purchased by Canadian manufacturers, as measured by the Raw Materials Price Index (RMPI), fell 0.3% due to lower prices for crude energy products.
Chart 1
Prices for industrial goods increase
Industrial Product Price Index, monthly change
The IPPI edged up 0.1% in February, following a 0.4% increase in January. The increase in the IPPI in February was widespread, with 17 commodity groups up, 2 down and 2 unchanged.
Motorized and recreational vehicles (+0.4%) contributed the most to the increase in the IPPI in February. The growth in this commodity group was mainly attributable to higher prices for motor vehicle engines and motor vehicle parts (+0.8%), aircraft (+1.2%), and aircraft engines, aircraft parts and other aerospace products (+1.3%). Higher prices for motorized and recreational vehicles were closely linked to the depreciation of the Canadian dollar relative to the US dollar.
Prices for chemicals and chemical products (+0.7%) and primary non-ferrous metal products (+0.7%) also pushed the IPPI upward.
Higher prices for plastic resins (+2.9%) and, to a lesser extent, petrochemicals (+0.7%) were the main source of the increase in chemicals and chemical products.
The gain in primary non-ferrous metal products was mainly attributable to higher prices for other unwrought non-ferrous metals and non-ferrous metal alloys (+2.4%). Higher prices for unwrought precious metals and precious metal alloys (+0.3%) and unwrought aluminum and aluminum alloys (+0.7%) also contributed to the increase in this commodity group.
Pulp and paper products (+1.2%) rose for the fifth consecutive month in February, mainly due to higher prices for wood pulp (+2.1%) and paper (except newsprint) (+1.6%).
The increase in the IPPI was mostly offset by lower prices for energy and petroleum products (-1.8%), following a 3.2% increase the previous month. The decline in this commodity group was mainly attributable to lower prices for light fuel oils (-4.0%), diesel fuel (-2.9%) and motor gasoline (-0.9%). The IPPI excluding energy and petroleum products rose 0.3%.
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 fell 1.3% relative to the US dollar. If the exchange rate had remained constant, the IPPI would have decreased 0.2% instead of rising 0.1%.
Industrial Product Price Index, 12-month change
The IPPI rose 1.9% over the 12-month period ending in February, following a 2.1% increase in January.
Compared with February 2017, the increase in the IPPI in February was mainly due to higher prices for energy and petroleum products (+10.6%), particularly motor gasoline (+13.5%), light fuel oils (+14.8%) and diesel fuel (+14.3%). Year over year, prices for energy and petroleum products have been on an upward trend since December 2016. The IPPI excluding energy and petroleum products rose 0.7% year over year.
Higher prices for pulp and paper products (+10.8%) also contributed to the year-over-year increase in the IPPI, but more moderately. The increase in this commodity group was mainly the result of higher prices for wood pulp (+24.8%). Year over year, this was the largest increase for pulp and paper products since March 2009 (+11.4%).
Primary non-ferrous metal products (+4.3%) also rose compared with February 2017. The increase in primary non-ferrous metal products was mainly due to higher prices for other unwrought non-ferrous metals and non-ferrous metal alloys (+11.7%), unwrought copper and copper alloys (+13.1%) and unwrought aluminum and aluminum alloys (+10.4%). However, lower prices for unwrought precious metals and precious metal alloys (-2.3%) moderated this growth.
Year over year, the increase in the IPPI was mainly offset by lower prices for motorized and recreational vehicles (-3.2%). Lower prices for passenger cars and light trucks (-4.1%) were mainly responsible for the decline in this commodity group. Prices for motor vehicle engines and motor vehicle parts (-2.1%) and aircraft (-2.5%) also declined compared with February 2017.
Raw Materials Price Index, monthly change
The RMPI fell 0.3% in February, following a 3.4% increase in January. Of the six major commodity groups, five were up and one was down.
Chart 2
Prices for raw materials decrease
The decline in the RMPI in February was primarily due to lower crude energy product prices (-1.9%), especially conventional crude oil (-1.9%). The RMPI excluding crude energy products rose 0.9%.
The decline in the RMPI was mainly offset by higher prices for metal ores, concentrates and scrap (+0.7%), which rose for the fifth consecutive month.
Other commodity groups with higher prices in February included animals and animal products (+0.6%) and crop products (+1.2%).
The increase in the animals and animal products group was primarily due to higher prices for live animals (+1.2%), particularly hogs (+4.6%).
Crop products rose mainly due to higher prices for soybeans (+10.1%), canola (including rapeseed) (+2.7%) and grain corn (+4.1%).
Raw Materials Price Index, 12-month change
Compared with the same month a year earlier, the RMPI rose 5.9% in February, continuing the upward trend that began in October 2016.
The increase in the RMPI was primarily due to crude energy products (+10.0%), specifically higher conventional crude oil prices (+10.2%). Year over year, crude energy prices have risen every month since July 2017. The RMPI excluding crude energy prices rose 2.9%.
Metal ores, concentrates and scrap prices (+6.5%) also contributed to the year-over-year increase in the RMPI, but to a lesser extent.
Prices for animals and animal products (+0.4%) and logs, pulpwood, natural rubber and other forestry products (+2.0%) also increased compared with February 2017.
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 April 9. 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 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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