According to Statistics Canada, the Machinery and Equipment Price Index (MEPI) decreased 0.9 percent in the second quarter compared with the previous quarter. This was the first quarterly decline since the second quarter of 2014. The import component was down 1.1 percent in the second quarter, while the domestic component fell 0.1 percent.
The Canadian dollar appreciated 1.0 percent against the US dollar in the second quarter compared with the first 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.
Among commodities, computers and computer peripheral equipment (-3.0 percent) contributed the most to the quarterly decrease of the total MEPI. Passenger cars (-1.2 percent), aircraft and aircraft engines (-1.0 percent), commercial and service industry machinery (-0.9 percent) and other industry-specific machinery (-0.8 percent) also contributed to the quarterly decline.
Compared with the second quarter of 2014, the total MEPI increased 11.2 percent, reflecting large price increases in the first quarter of 2015. The import component increased 13.3 percent and the domestic component was up 5.1 percent. The movement in the import component was partly influenced by the year-over-year depreciation of the Canadian dollar (-11.3 percent) against the US dollar.