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Canadian Industrial Product Price Index Up 1.4% in January

Full-Year 2013 Results
The Canadian Industrial Product Price Index (IPPI) rose 0.5 percent in 2013, led by higher prices for energy and petroleum products, according to Statistics Canada. The Raw Materials Price Index (RMPI) increased 0.9 percent as a result of higher prices for crude energy products.

On an annual basis, it was the fourth consecutive increase for the IPPI, however the advance in 2013 was smaller than in the three previous years. Of the 21 major commodity groups, 17 posted higher prices compared with 2012.

The petroleum and coal products group increase of 2.1 percent was the main reason for the overall advance of the IPPI in 2013. Price increases were observed for most petroleum products, notably motor gasoline (up 2.1 percent) and diesel fuel (up 4 percent). The IPPI excluding petroleum and coal products increased 0.1 percent in 2013.This advance resulted primarily from higher prices for motorized and recreational vehicles (up 1.2 percent).

The increase in prices for motorized and recreational vehicles was closely associated with the 3 percent depreciation of the Canadian dollar relative to the U.S. currency in 2013.

Other products also contributed to the increase of the IPPI excluding energy and petroleum products, notably meat, fish, and dairy products (up 2.5 percent). The advance of this commodity group was mostly attributable to higher prices for meat products (up 3.6 percent), specifically fresh and frozen pork (up 12.4 percent).

Conversely, the advance of the IPPI was moderated in large part by primary non-ferrous metal products (down 7.2 percent), which registered a second consecutive decline on an annual basis. The decrease was mostly due to lower prices for unwrought precious metals and precious metal alloys (down 12.9 percent), specifically unwrought silver and silver alloys, as well as unwrought gold and gold alloys.

January 2014 Results
The Canadian Industrial Product Price Index (IPPI) rose 1.4 percent in January, led by higher prices for energy and petroleum products, according to Statistics Canada. The Raw Materials Price Index (RMPI) increased 2.6 percent as a result of higher prices for crude energy products.

The IPPI rose 1.4 percent in January, the Index's third consecutive increase and the largest gain since February 2013. The gains were widespread, as 19 of 21 major commodity groups were up.

The growth of the IPPI was mainly attributable to higher prices for energy and petroleum products, which rose 2.3 percent. Light fuel oil (up 4.2 percent) and diesel fuel (up 3.7 percent) were primarily responsible for the increase in this commodity group. The IPPI excluding energy and petroleum products was up 1.2 percent in January.

Some Canadian producers who export their products report their prices in U.S. dollars. Consequently, the 2.8 percent decrease in the value of the Canadian dollar relative to the U.S. dollar may have had the effect of increasing the IPPI. Without the measurable effect of the exchange rate, the index would have risen 0.7 percent instead of 1.4 percent.

12-Month Change
Compared with January 2013, the IPPI increased 2.3 percent, after rising 1.3 percent in December. The increase in the IPPI was mainly attributable to energy and petroleum products (up 7 percent). The advance of this commodity group resulted primarily from higher prices for motor gasoline (up 7.2 percent) and, to a lesser extent, light fuel oil (up 11.5 percent) and diesel fuel (up 10 percent). The IPPI excluding energy and petroleum products rose 1.3 percent on a year-over-year basis.

Conversely, the advance of the IPPI over a 12-month period was moderated mostly by lower prices for primary non-ferrous metal products (down 8.0 percent), specifically unwrought precious metals and precious metal alloys (down 19.1 percent). On a year-over-year basis, primary non-ferrous metal products have been declining since December 2011.

Raw Materials Price Index
The RMPI rose 2.6 percent in January, the second consecutive monthly advance and the largest increase since July 2013. Of the six major commodity groups, four were up and two were down.

Crude energy products (up 3.7 percent) was the main contributor to the increase in the RMPI, largely because of higher prices for conventional crude oil (up 3.6 percent). The January increase in crude oil prices was partly due to higher demand because of the cold weather in North America. The RMPI excluding crude energy products was up 1.5 percent in January.

Conversely, the increase in the RMPI was moderated primarily by crop products (down 0.3 percent), which was led by lower prices for wheat (down 5.7 percent) and canola (down 3.9 percent).

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