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The Canadian Industrial Product Price Index declined 0.8 percent in April, led by lower prices for petroleum and coal products, according to Statistics Canada. The Raw Materials Price Index fell 2.2 percent, mostly because of decreased prices for crude oil.
The IPPI posted the first decrease since November 2012, as most commodity groups were down. It was the largest decline since December 2011. Of the 21 major commodity groups, 14 were down, three were up, and four were unchanged.
The largest contributor to the decline of the IPPI in April was petroleum and coal products (-3 percent), which fell largely because of lower prices for fuel oil and other fuels (-4.7 percent), specifically diesel fuel (-4.9 percent), as well as gasoline (-3.6 percent). The decrease in gasoline prices was partly due to high inventories of crude oil in North America. The IPPI excluding petroleum and coal products declined 0.4 percent in April.
Primary metal products (-2.8 percent) also contributed significantly to the decline of the IPPI, mainly as a result of lower prices for other non-ferrous metal products, specifically silver and platinum (-8.7 percent) and gold and gold alloys in primary form (-6.3 percent). There were also declines in copper and copper alloy products (-5.6 percent) and nickel products (-7.1 percent).
Among the other product groups that decreased was motor vehicles and other transportation equipment (-0.4 percent). The increase in the value of the Canadian dollar against the U.S. dollar was largely responsible for this decline.
Some Canadian producers who export their products report their prices in U.S. dollars. Consequently, the 0.6 percent appreciation of the Canadian dollar relative to the U.S. dollar may have had the effect of pushing the IPPI downward. Without the measurable effect of the exchange rate, the index would have fallen 0.6 percent instead of 0.8 percent.
The decline of the IPPI in April was moderated slightly by chemical products and rubber, leather and plastic fabricated products.
Compared with April 2012, the IPPI was unchanged, even though most commodity groups were up.
Prices for lumber and other wood products (up 10.3 percent) continued to rise on a year-over-year basis, extending the upward trend that began in February 2012. Higher prices for softwood lumber (up 19.9 percent) were largely responsible for the increase in this commodity group.
Motor vehicles and other transportation equipment (up 1.7 percent) also posted a year-over-year gain, mostly due to the 2.6 percent depreciation of the Canadian dollar relative to the U.S. dollar. Without the measurable effect of the exchange rate, the IPPI would have fallen 0.6 percent instead of being unchanged.
Among the other product groups that increased were electrical and communications products (up 2 percent), pulp and paper products (up 1.4 percent) and fruit, vegetables, feeds and other food products (up 1.1 percent).
Conversely, primary metal products (-5.3 percent) and petroleum and coal products (-3.3 percent) mainly offset the year-over-year price increases.
Compared with the same month a year earlier, the decrease in primary metal products was largely attributable to other non-ferrous metal products (-10.1 percent), iron and steel products (-3 percent) and copper and copper alloy products (-5.7 percent).
Gasoline (-6.9 percent) and fuel oil and other fuels (-2.2 percent) were mostly responsible for the decline in petroleum and coal products. The IPPI excluding petroleum and coal products was up 0.5 percent on a year-over-year basis.
Raw Materials Price Index
The RMPI fell 2.2 percent in April, the second consecutive monthly decline and the largest decrease since June 2012. All major product groups except one were down or unchanged.