Industrial product and raw materials price indexes, April 2018
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Released: 2018-05-30
April 2018
0.5% 
(monthly change)
April 2018
-0.1% 
(monthly change)
April 2018
0.7%
(monthly change)
April 2018
-1.3%
(monthly change)
Prices of products sold by Canadian manufacturers, as measured by the Industrial Product Price Index (IPPI), increased 0.5% in April, mainly due to higher prices for energy and petroleum products. Prices for raw materials purchased by Canadian manufacturers, as measured by the Raw Materials Price Index (RMPI), rose 0.7%, primarily due to higher prices for crude energy products.
Chart 1
Prices for industrial goods increase
Industrial Product Price Index, monthly change
The IPPI (+0.5%) posted its fourth consecutive monthly increase in April, following a 0.9% increase in March. Of the 21 major commodity groups, 7 were up, 11 were down and 3 were unchanged.
The increase was almost entirely due to higher prices for energy and petroleum products (+4.5%). In particular, prices rose for motor gasoline (+7.2%), light oil fuels (+3.4%) and diesel fuel (+3.5%). Lower production levels by members of the Organization of the Petroleum Exporting Countries (OPEC) continued to pressure supply and contributed to higher prices for petroleum products. Primary ferrous metal products (+0.8%) also contributed to the rise.
The IPPI excluding energy and petroleum products edged down 0.1% from March to April.
The main downward contributor was chemicals and chemical products (-0.5%). This decrease was mainly due to lower prices for liquefied refinery gases, and acyclic hydrocarbons not elsewhere classified (-7.3%), and pharmaceuticals and medicinal products (-0.9%). Lower pharmaceutical prices were attributable to an agreement between the pan-Canadian Pharmaceutical Alliance and the Canadian Generic Pharmaceutical Association, which lowered prices for a large number of generic drugs as of April 1, 2018.
Price declines were also observed in primary non-ferrous metal products (-0.3%), electrical, electronic, audiovisual and telecommunication products (-0.5%) and pulp and paper products (-0.5%).
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 March to April, the Canadian dollar rose 1.6% relative to the US dollar. If the exchange rate had remained constant, the IPPI would have increased 0.9% instead of 0.5%.
Industrial Product Price Index, 12-month change
The IPPI rose 2.4% over the 12-month period ending in April, matching the increase in March.
The year-over-year gains in the IPPI in April were largely attributable to higher prices for energy and petroleum products (+15.1%). Higher prices for motor gasoline (+16.5%), light fuel oils (+18.3%), and diesel fuel (+19.2%) were largely responsible for the increase in this commodity group. The IPPI excluding energy and petroleum products increased 0.4% year over year.
To a lesser extent, pulp and paper products (+12.3%) also contributed to the year-over-year increase in the IPPI. This increase was mainly the result of higher prices for wood pulp (+24.9%).
Primary non-ferrous metal products rose 2.5% compared with April 2017, mainly due to higher prices for other unwrought non-ferrous metals and non-ferrous metal alloys (+16.5%), and unwrought copper and copper alloys (+13.7%).
The year-over-year increase in the IPPI was partially offset by lower prices for motorized and recreational vehicles (-4.2%), particularly for passenger cars and light trucks (-5.3%). Prices for passenger cars and light trucks are closely linked to the US exchange rate. From April 2017 to April 2018, the Canadian dollar appreciated, resulting in a decrease in prices for these products.
Raw Materials Price Index, monthly change
The RMPI rose 0.7% in April after increasing 2.1% in March. Of the six major commodity groups, two were up and four were down.
Chart 2
Prices for raw materials increase
The increase in the RMPI in April was mainly due to higher prices for crude energy products (+3.2%). Conventional crude oil prices rose 3.2%, following a 5.6% increase the previous month. The RMPI excluding crude energy products decreased by 1.3%.
The increase in the RMPI was moderated by a decrease in prices for animals and animal products (-2.9%), largely driven by lower prices for hogs (-14.2%) and to a lesser extent, cattle and calves (-2.7%). Prices for metal ores, concentrates and scrap (-0.6%), crop products (-0.6%) and non-metallic minerals (-0.4%) also decreased.
Raw Materials Price Index, 12-month change
The RMPI rose 8.9% over the 12-month period ending in April, following a 10.0% year-over-year increase in March.
The increase in the RMPI in April compared with April 2017 was primarily due to higher prices for crude energy products (+20.0%). Conventional crude oil (+20.7%) was mainly responsible for the increase in this commodity group. On a year-over-year basis, the RMPI excluding crude energy products rose 0.6%.
To a lesser extent, higher prices for metal ores, concentrates and scrap (+4.1%) also contributed to the year-over-year increase in the RMPI.
The year-over-year increase in the RMPI was partially offset by decreasing prices for animals and animal products (-5.5%). Prices declined for live animals (-9.0%), including hogs (-14.9%) and cattle and calves (-8.3%).
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
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 June 11. For more information, consult the document Real-time CANSIM tables.
Next release
The industrial product and raw materials price indexes for May will be released on June 29.
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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