The Canadian Industrial Product Price Index declined 0.2 percent in May, mainly due to lower prices for energy and petroleum products. The Raw Materials Price Index fell 1.8 percent, primarily due to lower prices for crude energy products.
The IPPI declined 0.2 percent in May, after rising 0.6 percent in April. This was the first decline in the IPPI since August 2016. Of the 21 major commodity groups, 3 were down, 17 were up and 1 was unchanged.
The decline in the IPPI was mainly due to lower prices for energy and petroleum products (-3.5 percent). Motor gasoline (-3.3 percent), light fuel oils (-6.9 percent) and diesel fuel (-5.6 percent) were the main contributors to the decline in this product group. The IPPI excluding energy and petroleum products rose 0.4 percent.
To a lesser extent, primary non-ferrous metal products (-0.7 percent) also contributed to the decrease in the IPPI. The decline in this product group was largely attributable to lower prices for unwrought precious metals and precious metal alloys (-2.5 percent), particularly unwrought silver and silver alloys (-5.9 percent).
Higher prices for meat, fish, and dairy products (+1.7 percent) moderated the decline in the IPPI. This increase was mainly attributable to higher prices for fresh and frozen beef and veal (+4.9 percent). Higher prices for fresh and frozen pork (+1.7 percent) and processed meat products, other meats and animal by-products (+1.1 percent) also contributed to the increase in this product group.
Pulp and paper products (+1.9 percent) also moderated the decline in the IPPI. The increase in this product group was primarily due to higher prices for wood pulp (+4.7 percent).
Prices for motorized and recreational vehicles (+0.3 percent) also increased in May. The growth in this product group was mainly attributable to higher prices for motor vehicle engines and motor vehicle parts (+0.7 percent) and aircraft (+1.2 percent). Higher prices for motorized and recreational vehicles were closely linked to the depreciation of the Canadian dollar relative to the US dollar.
Some IPPI prices are reported in US dollars and converted to Canadian dollars using the average monthly exchange rate. Consequently, any change in the value of the Canadian dollar relative to the US dollar will affect the level of the index. From April to May, the Canadian dollar depreciated 1.2 percent relative to the US dollar. If the exchange rate had remained constant, the IPPI would have decreased 0.5 percent instead of 0.2 percent.
The IPPI rose 4.9 percent over the 12-month period ending in May, after increasing 6.3 percent in April.
The year-over-year increase in the IPPI was largely attributable to higher prices for energy and petroleum products (+8.9 percent). Motor gasoline (+5.5 percent), light fuel oil (+12.8 percent), diesel fuel (+9.1 percent) and heavy fuel oils (+23.4 percent) were the primary contributors to the rise in this commodity group. Year over year, the IPPI excluding energy and petroleum products was up 4.3 percent.
Compared with the same month a year earlier, primary non-ferrous metal products (+13.3 percent) also contributed significantly to the increase in the IPPI in May. Higher prices for other unwrought non-ferrous metals and non-ferrous metal alloys (+39.6 percent) led the gain in this commodity group. Unwrought aluminum and aluminum alloys (+21.5 percent) and unwrought copper and copper alloys (+24.9 percent) were also up compared with May 2016.
Year over year, chemicals and chemical products rose 7.4 percent, primarily due to higher prices for petrochemicals (+27.7 percent), particularly liquefied refinery gases, and acyclic hydrocarbons not elsewhere classified (+36.3 percent), and aromatic hydrocarbon gases (+23 percent).
Motorized and recreational vehicles (+3.2 percent) also rose compared with May 2016. The increase in this commodity group was mainly attributable to higher prices for passenger cars and light trucks (+2.7 percent), motor vehicle engines and motor vehicle parts (+3.4 percent) and aircraft (+5.9 percent).
The RMPI was down 1.8 percent in May, following a 1.6 percent increase in April. This was the largest decline in the RMPI since July 2016. Of the six major commodity groups, three were down and three were up.
The decrease in the RMPI was mainly due to lower prices for crude energy products (-5 percent), particularly conventional crude oil (-5 percent). This was the largest decline in conventional crude oil since November 2016. The RMPI excluding crude energy products rose 0.5 percent.
Lower prices for metal ores, concentrates and scrap (-1.8 percent) also contributed to the decline in the RMPI.
The decrease in the RMPI was partially moderated by higher prices for animals and animal products (+3.1 percent). The increase in this commodity group was mainly due to higher prices for hogs (+14.7 percent) and, to a lesser extent, cattle and calves (+1 percent).
Prices for crop products also rose in May (+1 percent). The increase in this commodity group was mainly due to higher prices for canola (including rapeseed) (+4.2 percent) and wheat (+2.4 percent).
The RMPI rose 8 percent in the 12-month period ending in May, following a 17.7 percent increase in April.
Compared with May 2016, the increase in the RMPI was largely due to higher prices for crude energy products (+10.3 percent), primarily conventional crude oil (+10.5 percent). The RMPI excluding crude energy products rose 6.4 percent.
Year over year, prices for metal ores, concentrates and scrap (+14.2 percent) also rose, following a 17.8 percent gain in April.
To a lesser extent, the animals and animal products group (+3.7 percent) also contributed to the year-over-year gain in the RMPI. The increase in this product group was mainly attributable to higher prices for cattle and calves (+6.6 percent), fish, shellfish and other fishery products (+18 percent) and unprocessed fluid milk (+2.8 percent). Lower prices for hogs (-2.3 percent) moderated the increase in this commodity group.
