Canadian dollar increased&nbsp ; 7.6% against the US dollar. If the impact of the exchange rate had been excluded, producer prices would have risen&nbsp ; 1.7% instead of falling&nbsp ; 0.3% between July&nbsp ; 2006&nbsp ; and July&nbsp ; 2007.

Prices for intermediate goods decline for a third consecutive month
Prices for intermediate goods fell&nbsp ; 0.8% between June and July, their third straight month-over-month decline. The reduction in prices was spread across all product categories except petroleum and coal products, and lumber and other wood products. The biggest contributors to the decrease were primary metal products, chemical products, and pulp and paper products.

Producers of intermediate goods received&nbsp ; 0.5% more for their products in July&nbsp ; 2007&nbsp ; than in July&nbsp ; 2006. The majority of the increase was due to chemical products, fruit, vegetables and feed products, and meat, fish and dairy products. However, the year-over-year advance was slowed by lower prices for petroleum and coal products, pulp and paper products, primary metal products, lumber, motor vehicles, and electrical and communication products.

Prices for finished products pulled down by motor vehicle prices
From June to July, prices for finished products edged down&nbsp ; 0.4%, their fourth consecutive monthly decrease. The decline was led by lower prices for motor vehicles, petroleum and coal products, machinery and equipment, and electrical and communication products.

Motor vehicles, and electrical and communication products are more sensitive to exchange rate changes. The few products that posted price increases, such as knitted products and clothing, and lumber and other wood products, had little impact on the monthly price decline of finished goods.

Since July&nbsp ; 2006, prices for finished products have fallen&nbsp ; 1.5%, the first decrease in eight months. Prices were down for motor vehicles, petroleum and coal products, and machinery and equipment. The index’s decline was moderated by higher prices for tobacco and tobacco products, chemical products as well as meat, fish and dairy products.

More details here would have decreased&nbsp ; 0.9% instead of&nbsp ; 0.7%.

Prices for lumber and other wood products rose&nbsp ; 0.9% in July following a&nbsp ; 0.6% gain in June. Lumber prices are still below the levels observed in previous years; specifically, they are&nbsp ; 2.2% lower than the average observed for&nbsp ; 2006. In July, the only products that registered significant price increases were particleboard (+17.4%), and veneer and plywood (+6.1%).

IPPI: First decrease in the 12-month change after&nbsp ; 22&nbsp ; consecutive advances
The IPPI edged down&nbsp ; 0.3% from July&nbsp ; 2006&nbsp ; to July&nbsp ; 2007, its first decline after&nbsp ; 22&nbsp ; months of increases. The IPPI was pulled downward mainly by motor vehicles and other transportation equipment, as well as petroleum and coal products. Prices were also down for pulp and paper products, primary metals, and electrical and communication products.

The IPPI excluding petroleum and coal grew&nbsp ; 0.3%, a slower pace than in preceding months.

Motor vehicle prices fell&nbsp ; 4.5% compared with July&nbsp ; 2006, a larger decrease than the one observed in June (-2.8%). Petroleum and coal prices also picked up their downward pace, declining&nbsp ; 5.0% compared with the&nbsp ; 0.6% drop in the previous month. Prices for primary metals registered their first decrease (-1.8%) since November&nbsp ; 2005, led by copper and copper alloys (-10.8%), aluminum products (-8.4%) and iron and steel products (-3.1%).

The IPPI’s downward movement was moderated by higher prices for chemical products (+3.5%), fruit, vegetables and feed products (+3.8%), tobacco and tobacco products (+14.7%) and meat, fish and dairy products (+2.0%).

RMPI: Soaring prices for mineral fuels drive up raw materials prices
Prices for raw materials rose&nbsp ; 3.9% in July, a higher rate of increase than in the first six months of&nbsp ; 2007. The RMPI was led by a sharp increase in prices for mineral fuels. On the other hand, lower prices for animals and animal products, non-ferrous metals and wood dampened the advance in the overall RMPI.

Mineral fuels jumped&nbsp ; 9.5% as a result of a sharp increase in the price of crude oil (+11.9%). Without mineral fuels, the RMPI would have declined&nbsp ; 0.9% from June instead of rising&nbsp ; 3.9%.

Prices for animals and animal products dropped&nbsp ; 1.9%, mainly because of lower prices for cattle for slaughter (-4.0%). An increase in feed costs resulted in an oversupply of slaughter animals.

There was a&nbsp ; 0.6% decline in prices for non-ferrous metals, notably radioactive concentrates (-3.6%), zinc concentrates (-4.7%) and nickel concentrates (-21.0%). In contrast, lead prices soared&nbsp ; 29.1% due to strong international demand, offsetting much of the decrease in other metal prices.

On a 12-month basis, raw materials prices rose&nbsp ; 3.5% in July, down from the&nbsp ; 4.9% rate of increase in June. Prices for raw materials were propelled mainly by a&nbsp ; 28.2% jump in prices for non-ferrous metals, which was dampened by a&nbsp ; 5.8% drop in mineral fuels. Without mineral fuels, the RMPI would have increased&nbsp ; 14.2% instead of&nbsp ; 3.5%.

Non-ferrous metals accounted for most of the 12-month increase, with prices rising&nbsp ; 28.2%, mainly on the strength of year-over-year advances in the prices of radioactive concentrates and lead concentrates.

Prices were also up from the previous year in the case of vegetable products (+15.3%), wood (+10.5%) and animals and animal products (+1.6%).

Impact of the exchange rate
The value of the Canadian dollar against the US dollar rose&nbsp ; 1.4% from June to July. Consequently, without the effect of the exchange rate, the change in the IPPI would have been a&nbsp ; 0.3% decline instead of a&nbsp ; 0.7% decline.

On a 12-month basis, the value of theSource: Statistics Canada

In July, falling prices for metals and the strength of the Canadian dollar drove the prices of manufactured products down for a third consecutive month, while a jump in crude oil prices pushed raw materials prices upward.
&nbsp ;
From June to July, prices charged by manufacturers, as measured by the Industrial Product Price Index (IPPI), fell&nbsp ; 0.7% following two consecutive monthly declines. The drop in prices essentially reflects lower prices for primary metal products, motor vehicles and other transportation equipment, as well as chemical products. However, higher prices for petroleum and coal products, and lumber and other wood products tempered the decline in the IPPI.
&nbsp ;
On a 12-month basis, the IPPI edged down&nbsp ; 0.3%, its first decrease after&nbsp ; 22&nbsp ; consecutive advances. The most significant declines were in motor vehicles and other transportation equipment, and petroleum and coal products. The downward movement was slowed by a rise in prices for chemical products, fruit, vegetables and feed products, and tobacco and tobacco products, among others.

The Raw Materials Price Index (RMPI) rose&nbsp ; 3.9% from June to July, led almost exclusively by a jump in the prices of mineral fuels. The largest price decreases were in animals and animal products, non-ferrous metals and wood.
&nbsp ;
Compared with July&nbsp ; 2006, raw materials cost plants&nbsp ; 3.5% more, a lower year-over-year rate of increase than the&nbsp ; 4.9% recorded in June. The rise in the index was mainly due to prices for non-ferrous metals, while it was slowed by prices for mineral fuels.

In July, the IPPI was&nbsp ; 115.6&nbsp ; (1997=100), down from June’s revised level of&nbsp ; 116.4. The RMPI was&nbsp ; 181.4&nbsp ; (1997=100), up from June’s revised level of&nbsp ; 174.6.

IPPI: Primary metal products lead decline in industrial prices
Month over month, manufacturers’ prices were pulled downward mainly by falling prices for primary metal products and, to a lesser extent, for motor vehicles and other transportation equipment, and chemical products. However, the decline in the overall index was slowed by higher prices for petroleum and coal products, and lumber and other wood products.

Prices for primary metal products dropped&nbsp ; 3.9% in July after two consecutive monthly decreases. The index has fallen&nbsp ; 10.9% since reaching a record high in April. Nickel products plummeted&nbsp ; 21.0% in July, following a similar decline in June (-22.2%). Nickel prices are returning to more realistic levels as a result of high inventories and production cuts in the steel industry.
&nbsp ;
Other decreases in metal prices had less effect on the movement of the primary metal products index, in particular, aluminum products (-1.9%) and iron and steel products (-0.9%). The price reductions for those metals reflect the slowdown of economic activity in the United States and high levels of inventories. The decline in the primary metals index was partly offset by a&nbsp ; 2.5% increase in the prices of copper and copper alloys, due to lower production in Africa and Latin America and low inventories.

Prices for motor vehicles fell&nbsp ; 0.8%, their sixth consecutive month-over-month decline. Prices for motor vehicles are still affected by the rise in the Canadian dollar’s value against the US currency.

Prices for chemical products were down&nbsp ; 1.6%, following a&nbsp ; 0.1% dip in June. They were led by declines in prices for ammonia and urea-based fertilizer, both of which fell&nbsp ; 18.3%. These two products were affected by weaker demand.

The IPPI’s decline was moderated by petroleum and coal products, which advanced&nbsp ; 0.8% after a&nbsp ; 2.6% drop in June. If the prices for petroleum and coal products had been excluded, the IPPI