Home » Canada Industrial Product Price Index Rises 0.6% in November
Canada Industrial Product Price Index Rises 0.6% in November
January 4, 2008
Source: Statistics Canada
In November, prices in Canada for manufactured products and raw materials were pushed up by surging petroleum prices.
From October to November, prices charged by manufacturers, as measured by the Industrial Product Price Index (IPPI), rose 0.6%, a marginal increase after six consecutive monthly declines. The rise in the index was caused almost exclusively by surging prices for petroleum and coal products.
On a 12-month basis, the IPPI declined 0.6%, continuing the downward trend. Declines in the prices for motor vehicles and other transport equipment, primary metal products and pulp and paper products were tempered by the steep increase in the prices for petroleum and coal products.
The exchange rate, reflecting the ongoing effect of a strong Canadian dollar in relation to its US counterpart, had less of an impact on price declines than it had in the previous month. If the exchange rate that is used to convert these prices had remained unchanged from the previous month, the IPPI would have risen 0.9% compared to October instead of 0.6%, and on a 12-month basis, the IPPI would have risen 3.6% rather than falling 0.6%.
The Raw Materials Price Index (RMPI) jumped 3.4% from October to November, a stronger increase than the 0.7% recorded the previous month. In November, the RMPI was pushed up solely by the rise in crude oil prices, while prices for the other product groups continued their downward trend.
Compared to November 2006, raw materials cost plants 15.7% more. The increase in the index was supported primarily by higher prices for mineral fuels and vegetable products.
In November, the IPPI was 113.0 (1997=100), up from October's revised level of 112.3. The RMPI was 181.9 (1997=100), up from October's revised level of 175.9. IPPI: Slight price increase after six consecutive monthly declines Month over month, manufacturers' prices were pushed up mainly by the surging prices for petroleum and coal products, while prices for non-energy products generally continued their downward trend. Among the products showing declines, primary metal products and motor vehicles and other transport equipment contributed the most to moderate the effect of rising petroleum and coal products.
In November, prices for petroleum and coal products jumped 7.2%, reaching a new historical peak. Excluding the prices for petroleum and coal, the IPPI would have decreased 0.2% rather than rising 0.6%, and it would have registered an eighth consecutive monthly decline. Apart from the surging prices for petroleum and coal products, few products posted a significant increase; among them were chemical products and fruit, vegetables and feed products.
Prices for primary metal products declined 1.8% compared with October, mainly owing to a drop in primary copper products (-16.3%). Copper products were hit by the slowdown in economic activity in the United States and excess global supply in relation to demand. Refined zinc products, also affected by excess supply, fell 16.4%. Prices for motor vehicles and other transport equipment declined 0.5%, mainly owing to the effect of the appreciation of the Canadian dollar against its US counterpart. IPPI: 12-month change shows downward price trend continuing The IPPI fell 0.6% from November 2006 to November 2007, after posting a 1.1% decline in October and declines in July (-0.3%) and August (-0.6%). The 14.9% drop in the value of the US dollar in the past 12 months was a factor that influenced the movement of prices in the IPPI. Lower prices for motor vehicles, primary metal products and pulp and paper products more than offset the effect of increased prices for petroleum and coal products.