June 2, 2008

Source: Statistics Canada

In April, a second consecutive strong monthly increase in petroleum prices caused indexes for manufactured goods and raw materials prices to reach record levels in Canada.

From March to April, prices charged by Canadian manufacturers, as measured by the Industrial Product Price Index (IPPI), rose 1.4%. While down slightly from the 1.8% increase observed in March, the growth in prices remained strong for a second consecutive month, pushing the IPPI above its last historical peak reached in April 2007. This increase was almost entirely driven by petroleum and coal products, which continued their upward climb with an increase of 7.9%, similar to the rate recorded in March.

Prices of other IPPI products, …

Manufacturing failed to grow in May, according to the nation’s supply executives in the latest Manufacturing ISM Report On Business.

According to the report, the manufacturing sector failed to grow in May as the PMI fell below 50% for the fourth consecutive month.

In relative terms, May was down slightly from April as the rate of contraction in manufacturing slowed. The Production Index was a bright spot as it moved above 50% after declining for two months.

Manufacturers find themselves caught between rising costs and weakening demand in many industries. Exports continue strong due to the weak dollar — without the weak dollar the story would be much more negative in manufacturing.

Daniel Meckstroth, chief economist for the …