According to Statistics
Canada, the Canadian Machinery and Equipment Price Index (MEPI) increased 3.9 percent in the fourth quarter compared with the previous quarter. The import component was up 4.7 percent over the period, while the domestic component rose 1.5 percent.
The Canadian dollar depreciated 4.1 percent against the US dollar in the fourth quarter compared with the third quarter. Variations in exchange rates can have a significant influence on the MEPI given the high weight of imported machinery and equipment in the index.
Every industry reported higher prices of machinery and equipment purchased in the fourth quarter. The finance, insurance and real estate industry (+4.5 percent) was the largest contributor to the quarterly rise in the total MEPI. Both subsectors of this industry experienced increases, as the real estate and rental and leasing subcomponent was up 4.3 percent, while the finance and insurance subcomponent increased 4.6 percent. The second largest contributor to the quarterly increase was transportation and warehousing (+4.3 percent).
Most commodities posted price increases in the fourth quarter. Computers and computer peripheral equipment (+4.0 percent) and logging, mining and construction machinery and equipment (+3.1 percent) were the commodities that contributed the most to the quarterly increase of the total MEPI.
Compared with the fourth quarter of 2013, the total MEPI increased 7.7 percent, with the import component rising 9.4 percent and the domestic component up 2.6 percent. The movement in the import component was partly influenced by the year-over-year depreciation of the Canadian dollar (-7.6 percent) against the US dollar.