Canada's industrial product price index increased 1 percent in October, following a 0.3 percent decrease in September. Of the 21 major commodity groups, 18 were up, 1 was down and 2 were unchanged.
The growth in the IPPI was largely attributable to higher prices for motorized and recreational vehicles (+1.5 percent). The increase in this product group was mainly the result of higher prices for passenger cars and light trucks (+1.2 percent), motor vehicle engines and motor vehicle parts (+1.5 percent) and aircraft (+2.7 percent). The increase in prices for motorized and recreational vehicles was closely linked to the depreciation of the Canadian dollar relative to the US dollar.
Higher prices for energy and petroleum products (+1.5 percent) also contributed significantly to the increase in the IPPI. Light fuel oils (+6.5 percent) and diesel fuel (+5.1 percent) were the main contributors to the increase in this product group, while lower prices for motor gasoline (-2.2 percent) moderated the gain. The IPPI excluding energy and petroleum products rose 0.9 percent.
Prices for primary non-ferrous metal products (+2.1 percent) also increased in October. Unwrought copper and copper alloys (+5.9 percent) and unwrought aluminum and aluminum alloys (+5.2 percent) were the largest contributors to the gain in this product group. Other unwrought non-ferrous metals and non-ferrous metal alloys (+3.3 percent) also contributed to the advance.
Higher prices for chemicals and chemical products (+1.6 percent) and electrical, electronic, audiovisual and telecommunication products (+1.4 percent) also contributed to the increase in the IPPI, but to a lesser extent.
The increase in chemicals and chemical products was mainly due to higher prices for liquefied refinery gases, and acyclic hydrocarbons not elsewhere classified (+20.5 percent).
Higher prices for electronic and electrical parts (+1.8 percent) and communication and audio and video equipment (+1.2 percent) were mainly responsible for the increase in the electrical, electronic, audiovisual and telecommunication products group.
The increase in the IPPI was moderated by lower prices for meat, fish and dairy products (-0.7 percent). Lower prices for fresh and frozen pork (-2.2 percent) and processed meat products, other meats and animal by-products (-2.6 percent) led the decline in this product group. Conversely, prices for fresh and frozen beef and veal increased 1.3 percent in October.
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 September to October, the Canadian dollar depreciated 2.6 percent relative to the US dollar. If the exchange rate had remained constant, the IPPI would have increased 0.4 percent instead of 1 percent.
The RMPI rose 3.8 percent in October, following a 0.2 percent decline the previous month. Of the six major commodity groups, five were up and one was down.
The increase in the RMPI was primarily due to higher prices for crude energy products (+6.9 percent), particularly conventional crude oil (+7.2 percent). The RMPI excluding crude energy products increased 1.7 percent.
Prices for metal ores, concentrates and scrap (+3.7 percent) also contributed significantly to the increase in the RMPI.
Crop products (+1.1 percent) and animals and animal products (+0.3 percent) contributed to the increase in the RMPI as well, but to a lesser extent.
The increase in crop products was mainly attributable to higher prices for oats (+6.6 percent), wheat (+1.8 percent) and canola (including rapeseed) (+2.2 percent).
Cattle and calves (+3 percent) were the largest contributor to the increase in animals and animal products, while lower prices for hogs (-2.1 percent) moderated the gain.