Canadian Industrial Product Price Index Up in January

Raw materials price index increased 3.3 percent during the month.

Prices for products sold by Canadian manufacturers, as measured by the Industrial Product Price Index (IPPI), rose 0.3 percent in January, 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), increased 3.3 percent, primarily as a result of higher prices for crude energy products.

Of the 21 major commodity groups, 7 were up, 10 were down and 4 were unchanged.

Prices for energy and petroleum products (+3.4 percent) were largely responsible for the increase in the IPPI in January. The increase in this product group was mainly due to higher prices for motor gasoline (+3.8 percent), diesel fuel (+4.6 percent) and light fuel oils (+3.8 percent). The IPPI excluding energy and petroleum products edged down 0.1 percent.

Primary non-ferrous metal products (+1 percent) and meat, fish and dairy products (+0.9 percent) also contributed to the increase in the IPPI in January, but to a lesser extent.

Higher prices for unwrought precious metals and precious metal alloys (+2.8 percent) were mainly responsible for the increase in primary non-ferrous metal products. Unwrought aluminum and aluminum alloys (+1.2 percent) and unwrought copper and copper alloys (+1.2 percent) also exerted upward pressure on this product group.

The increase in meat, fish and dairy products was mainly due to higher prices for fresh and frozen beef and veal (+3.2 percent). Prices for fresh and frozen pork (+0.8 percent) and fresh and frozen poultry of all types (+0.9 percent) also rose in January.

The increase in the IPPI was primarily moderated by lower prices for motorized and recreational vehicles (-0.9 percent). The decline in this product group was mainly attributable to lower prices for motor vehicle engines and motor vehicle parts (-1.5 percent), aircraft (-2.4 percent) and aircraft engines, aircraft parts and other aerospace products (-2.3 percent). The decrease in prices for motorized and recreational vehicles was closely linked to the appreciation of the Canadian dollar relative to the US dollar.

Electrical, electronic and audio-visual telecommunications products (-1.2 percent) also decreased in January, mainly due to lower prices for electronic and electrical parts (-2.7 percent) and communication and audio and video equipment (-1.4 percent).

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 December to January, the Canadian dollar rose 2.7 percent relative to the US dollar. If the exchange rate had remained constant, the IPPI would have increased 1 percent instead of 0.3 percent.

The RMPI rose 3.3 percent in January, following a 0.9 percent decline the previous month. Of the six major commodity groups, four were up, one was down and one was unchanged.

The increase in the RMPI was primarily due to higher prices for crude energy products (+5.9 percent), specifically conventional crude oil (+5.9 percent). The RMPI excluding crude energy products rose 1.2 percent in January.

Prices for animals and animal products also contributed to the increase in the RMPI, rising by 1.9 percent after declining 0.2 percent in December. Higher prices for live animals (+3.3 percent), particularly for hogs (+7.4 percent) and, to a lesser extent, cattle and calves (+1.6 percent), were largely responsible for the gain in animals and animal products.

Prices for metal ores, concentrates and scrap (+1.5 percent) increased for the fourth consecutive month in January.

 

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