Canada's industrial product price index declined 1.5 percent in July, mainly due to lower prices for motorized and recreational vehicles, according to Statistics Canada. The Raw Materials Price Index decreased 0.6 percent, mostly attributable to lower prices for metal ores, concentrates and scrap. Of the 21 major commodity groups, 18 were down, one was up and two were unchanged.

Prices for motorized and recreational vehicles (-3.3 percent), which posted their largest decline since May 2009 (-3.9 percent), were primarily responsible for the decline in the IPPI in July. Lower prices for passenger cars and light trucks (-3.5 percent), motor vehicle engines and motor vehicle parts (-2.7 percent) and aircraft (-4.4 percent) led the decline in this commodity group. Lower prices for motorized and recreational vehicles were closely linked to the appreciation of the Canadian dollar relative to the US dollar.

Prices for primary non-ferrous metal products (-4.2 percent) were down for a third consecutive month. Lower prices for unwrought precious metals and precious metal alloys (-6.5 percent) were the largest contributors to the decline in this commodity group. Other unwrought non-ferrous metals and non-ferrous metal alloys (-4.1 percent) and unwrought aluminum and aluminum alloys (-3.6 percent) also contributed to the decrease, but to a lesser extent.

Chemicals and chemical products (-2.9 percent) also contributed to the decline in the IPPI, mainly due to lower prices for petrochemicals (-8.9 percent) and ammonia and chemical fertilizers (-13.3 percent).

To a lesser extent, electrical, electronic, audiovisual and telecommunication products (-1.9 percent) and pulp and paper products (-1.6 percent) also contributed to the decline in the IPPI.

Lower prices for electronic and electrical parts (-3.4 percent) and communication and audio and video equipment (-2.4 percent) were mainly responsible for the decrease in electrical, electronic, audiovisual and telecommunication products.

The decline in the pulp and paper product group was mainly due to lower prices for wood pulp (-1.7 percent), paper (except newsprint) (-1.5 percent) and disposable diapers and feminine hygiene products (-6.3 percent).

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 June to July, the Canadian dollar appreciated 4.6 percent relative to the US dollar. If the exchange rate had remained constant, the IPPI would have decreased 0.4 percent instead of 1.5 percent.

The IPPI rose 1.3 percent in the 12-month period ending in July, following a 3.1 percent increase in June.

The year-over-year gain in the IPPI from July 2016 was largely due to higher prices for energy and petroleum products (+3.8 percent), which have been up year over year since December 2016. Motor gasoline (+5.7 percent) and, to a lesser extent, light fuel oil (+3.5 percent), heavy fuel oil (+7.4 percent) and diesel fuel (+2.1 percent) were the main contributors to the increase in this commodity group. The IPPI excluding energy and petroleum products rose 0.9 percent year over year.

The meat, fish, and dairy products group (+3.2 percent) also contributed significantly to the year-over-year growth of the IPPI. The increase in this commodity group was mainly due to higher prices for fresh and frozen pork (+8 percent), fresh and frozen poultry of all types (+4.8 percent) and fresh and frozen beef and veal (+2.1 percent).

Primary ferrous metal products increased 7.4 percent from July 2016, mainly due to higher prices for iron and steel basic shapes (+8.9 percent) as well as wire and other rolled and drawn steel products (+11.3 percent).

Among other commodity groups that contributed to the year-over-year increase in the IPPI were pulp and paper products (+4.7 percent) and chemicals and chemical products (+2.3 percent).

The price increase in the pulp and paper group was mainly due to higher wood pulp prices (+15.2 percent). Petrochemicals (+5 percent), chemical products, not elsewhere classified (+4.4 percent), and basic organic chemical products, not elsewhere classified (+14.4 percent) were the main contributors to the rise in chemical products.

The year-over-year increase in the IPPI was primarily moderated by motorized and recreational vehicle prices (-2 percent). Lower prices for passenger cars and light trucks (-2.8 percent) were mainly responsible for the decline in this commodity group.

The RMPI (-0.6 percent) was down for a third consecutive month in July, following a 3.6 percent decrease in June. Of the six major commodity groups, three were down and three were up.

Lower prices for metal ores, concentrates and scrap (-2.4 percent) were the main reason for the decrease in the RMPI. The decline in this group was the third in a row and the most significant since November 2015 (-5.8 percent).

Crude energy products (-0.6 percent) also contributed to the decline in the RMPI. The decline in this group was due to lower prices for conventional crude oil (-0.8 percent). The RMPI excluding crude energy products was down 0.6 percent in July.

The decline in the RMPI was primarily moderated by higher prices for crop products (+1.1 percent) and animals and animal products (+0.3 percent).

Wheat (+9.2 percent), which posted its strongest growth since March 2014, was responsible for the increase in crop products. Rising prices for animals and animal products was due to higher prices for live animals (+0.5 percent), particularly hogs (+4.1 percent), while lower prices for cattle and calves (-2.2 percent) moderated the increase in this group.

The RMPI rose 4.5 percent in the 12 months to July, following a 2.3 percent gain in June.

Crude energy products (+5 percent) contributed the most to the year-over-year increase in the RMPI, mainly due to higher prices for conventional crude oil (+4.8 percent).

Animals and animal products (+6.9 percent) also contributed significantly to the year-over-year increase in the RMPI, mainly attributable to higher prices for hogs (+12 percent) and cattle and calves (+8.9 percent).

Metal ores, concentrates and scrap (+5.1 percent) also increased in July as prices rose year over year for the 13th consecutive month.

On a year-over-year basis, the increase in the RMPI was slightly moderated by lower prices for crop products (-1.1 percent). The decline in this group was mainly due to lower prices for oilseeds (except canola) (-13.6 percent) and other miscellaneous crop products (-13.3 percent).