The Canadian Industrial Product Price Index (IPPI) was down 0.1 percent in October compared with September, largely the result of lower prices for petroleum and coal products, according to Statistics Canada. The Raw Materials Price Index (RMPI) was unchanged in October. The decline in non-ferrous metals was offset by increases in most commodity groups, particularly mineral fuels.

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Industrial Product Price Index, Monthly Change
The IPPI edged down 0.1 percent in October, following a 0.5 percent increase in September. With this decline, the index returned to the same level as in January.

The largest contributor to the IPPI decrease in October was petroleum and coal products (-1.1 percent). General price declines were observed for gasoline and fuel oil products, especially gasoline (-3.1 percent), which was down for the first time in four months. The IPPI excluding petroleum and coal products rose 0.2 percent.

Among other groups that decreased was primary metal products (-0.8 percent), specifically aluminum products (-2.1 percent), other non-ferrous metal products (-1.3 percent) and copper and copper alloy products (-1.9 percent).

The decrease of the IPPI was moderated primarily by motor vehicles and other transportation equipment (+0.7 percent), which rose for the first time since June. The decrease of the Canadian dollar against the US dollar in October was largely responsible for the advance.

Most Canadian producers who export their products are paid in US dollars. Consequently, the 0.9 percent decrease in the value of the Canadian dollar relative to the US dollar in October could have the effect of increasing the corresponding prices in Canadian dollars. Without the measurable impact of the exchange rate, the IPPI would have fallen 0.3 percent instead of 0.1 percent.

Increased prices for chemical products; meat, fish and dairy products; and machinery and equipment also moderated the decline of the IPPI.

Industrial Product Price Index, 12-Month Change
Compared with October 2011, the IPPI was down 0.2 percent, its third consecutive year-over-year decline.

The index was mainly driven down by primary metal products (-3.1 percent), in particular, lower prices for aluminum products (-10.6 percent) and iron and steel products (-2.9 percent).

Motor vehicles and other transportation equipment (-1.5 percent) and chemical products (-3.0 percent) also contributed significantly to the decline of the IPPI.

The 3.3 percent year-over-year increase in the value of the Canadian dollar against the US dollar could have the effect of decreasing the IPPI. Without the measurable impact of the exchange rate, the IPPI would have risen 0.6 percent instead of falling 0.2 percent.

Compared with October 2011, the IPPI decline was moderated primarily by lumber and other wood products (+7.1 percent) and, to a lesser extent, by fruit, vegetables, feeds and other food products and by petroleum and coal products.

The IPPI excluding petroleum and coal products fell 0.4 percent on a year-over-year basis.

Raw Materials Price Index, Monthly Change
After posting three consecutive monthly increases, the RMPI was unchanged in October. The decline in non-ferrous metals was offset by increases in most commodity groups, particularly mineral fuels.

The decrease in non-ferrous metals (-2.3 percent) mainly resulted from lower prices for copper concentrates (-3.3 percent), radioactive concentrates (-5.6 percent) and zinc concentrates (-3.8 percent). The decline in copper prices was partly attributable to reduced demand.

Conversely, the decline in metals was moderated by mineral fuels, specifically crude oil (+0.5 percent), which posted its fourth consecutive increase. The RMPI excluding mineral fuels was down 0.5 percent in October.

Among other groups that increased were wood products, animals and animal products, and ferrous materials.

Raw Materials Price Index, 12-Month Change
Compared with October 2011, the RMPI fell 2.8 percent, its eighth consecutive year-over-year decrease.

The decline of the RMPI was largely the result of mineral fuels, specifically crude oil (-5.3 percent). The RMPI excluding mineral fuels decreased 0.2 percent compared with October 2011.

Downward pressure was also exerted on the RMPI by animals and animal products and by ferrous materials.

Compared with October 2011, the RMPI decline was slightly moderated by wood products (+6.4 percent) and vegetable products (+1.7 percent).