Canadian industrial product and raw material prices decrease in November

Friday, 04 January 2019 21:03:18 (GMT+3)   |   San Diego
       

According to Statistics Canada, prices for products sold by Canadian manufacturers, as measured by the Industrial Product Price Index (IPPI), decreased 0.8 percent in November, mainly due to lower prices for energy and petroleum products. Prices for raw materials purchased by Canadian manufacturers, as measured by the Raw Materials Price Index (RMPI), fell 11.7 percent, largely reflecting lower prices for crude energy products.

The IPPI was down 0.8 percent in November, following a 0.2 percent increase in October. Of the 21 major commodity groups, 3 were down, 17 were up and 1 was unchanged.

Although prices for most of the major commodity groups rose compared with October, the IPPI fell in November. The decline in the index was mainly due to lower prices for energy and petroleum products (-6.6 percent) and, to a lesser degree, chemicals and chemical products (-1.6 percent).

Of the 17 commodity groups that were up in November, higher prices for motorized and recreational vehicles (+0.6 percent) had the greatest moderating effect on the decrease in the IPPI. This increase was mostly attributable to higher prices for motor vehicle engines and motor vehicle parts (+0.8 percent), aircraft (+1.6 percent) and aircraft engines, aircraft parts and other aerospace equipment (+1.4 percent). Higher prices for motorized and recreational vehicles were closely linked to the depreciation of the Canadian dollar relative to the US dollar.

The IPPI rose 2.8 percent in November compared with the same month a year earlier, after increasing 5.2 percent in October.

Energy and petroleum products (+3.6 percent) contributed the most to the year-over-year growth in the IPPI in November. Diesel fuel (+9.5 percent), asphalt (except natural) and asphalt products (+19.9 percent) and light fuel oils (+5.3 percent) were largely responsible for the gain in this commodity group. This growth was moderated by lower prices for motor gasoline (-5.7 percent). The IPPI excluding energy and petroleum products rose 2.6 percent compared with November 2017.

Year over year, primary ferrous metal products rose 14.0 percent, mainly driven upward by prices for iron and steel basic shapes (+19.1 percent) and wire and other rolled and drawn steel products (+17.4 percent).

Motorized and recreational vehicles were up 2.1 percent compared with November 2017. The growth in this commodity group was primarily driven by higher prices for motor vehicle engines and motor vehicle parts (+2.9 percent), aircraft (+5.2 percent) and passenger cars and light trucks (+0.7 percent).

The RMPI was down 11.7 percent in November, after falling 2.3 percent in October. Of the six major commodity groups, four were down and two were up.

Crude energy products (-24.9 percent) were largely responsible for the decline in the RMPI, specifically conventional crude oil (-25.7 percent). This was the fourth consecutive month that the commodity group was down, and the most significant decrease for this group since December 2008 (-31.0 percent). Lower prices for crude energy products reflected a global surplus in the supply of crude oil. The RMPI excluding crude energy products declined 0.5 percent.

The RMPI fell 9.9 percent during the 12-month period ending in November, following a 7.7 percent increase in October. This was the first year-over-year decline in the RMPI since September 2016.

The decrease in the RMPI compared with November 2017 was largely attributable to lower prices for crude energy products (-20.9 percent). Conventional crude oil (-21.8 percent) was mainly responsible for this decline. The RMPI excluding crude energy products fell 1.0 percent.

Prices for metal ores, concentrates and scrap (-2.6 percent) were also down compared with November 2017.


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