Canada's industrial product price index decreased 0.3 percent in September, following a 0.4 percent increase in August. Of the 21 major commodity groups, 16 were down, 4 were up and 1 was unchanged.
Among the four major commodity groups that saw higher prices in September, energy and petroleum products (+4.4 percent) posted the largest increase. This growth was primarily due to higher prices for motor gasoline (+3.8 percent), light fuel oil (+5.7 percent) and diesel fuel (+4.8 percent). This was the largest increase for energy and petroleum products since December 2016, when prices rose 5.5 percent. The IPPI excluding energy and petroleum products decreased 0.9 percent.
Motorized and recreational vehicles (-1.6 percent), which decreased for a fourth consecutive month, was the largest contributor to the decline in the IPPI. Lower prices for passenger cars and light trucks (-1.8 percent), motor vehicle engines and motor vehicle parts (-1.5 percent) and aircraft (-2.5 percent) were mainly responsible for 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 U.S. dollar.
The meat, fish and dairy products group (-3.1 percent) also contributed significantly to the decrease in the IPPI. Lower prices for fresh and frozen pork (-8.9 percent), fresh and frozen beef and veal (-4.7 percent) and processed meat products, other meat and animal by-products (-4.1 percent) were the main contributors to this decrease. This was the third consecutive decline in the meat, fish and dairy products group and the largest since September 2004 (-3.7 percent).
Pulp and paper products (-1.2 percent) and electrical, electronic, audiovisual and telecommunication products (-1 percent) also contributed to the decline in the IPPI, but to a lesser extent.
The decrease in the pulp and paper products group was mainly due to lower prices for wood pulp (-1.4 percent).
Lower prices for communication and audio and video equipment (-1.4 percent) and electronic and electrical parts (-1.7 percent) were mainly responsible for the decline in the electrical, electronic, audiovisual and telecommunication products commodity group.
Some IPPI prices are reported in U.S. 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 U.S. dollar will affect the level of the index. From August to September, the Canadian dollar rose 2.6 percent in relation to the US dollar. If the exchange rate had remained constant, the IPPI would have increased 0.3 percent instead of decreasing 0.3 percent.
The IPPI rose 1.5 percent in the 12-month period ending in September, following a 2.3 percent increase in August.
Compared with September 2016, the increase in the IPPI was largely attributable to higher prices for energy and petroleum products (+12.5 percent), up year over year for a 10th consecutive month. The growth in this commodity group was mainly due to higher prices for motor gasoline (+13.6 percent), light fuel oil (+12.6 percent) and diesel fuel (+12.9 percent). The IPPI excluding energy and petroleum products increased 0.2 percent from the same month last year.
On a year-over-year basis, primary non-ferrous metal products (+2.5 percent) also contributed to the increase in the IPPI. Prices for unwrought copper and copper alloys (+31.2 percent), other unwrought non-ferrous metals and non-ferrous metal alloys (+18 percent) and unwrought aluminum and aluminum alloys (+14.5 percent) mainly contributed to the increase in primary non-ferrous metal products.
Pulp and paper products were up 4.4 percent compared with September 2016, primarily due to higher prices for wood pulp (+12.8 percent).
The year-over-year increase in the IPPI was primarily moderated by lower prices for motorized and recreational vehicles (-4.2 percent). Lower prices for passenger cars and light trucks (-4.9 percent) and, to a lesser extent, motor vehicle engines and motor vehicle parts (-2.8 percent) and aircraft (-4.9 percent) were largely responsible for the decline in this commodity group.
Prices for electrical, electronic, audiovisual and telecommunication products (-2.4 percent) were also down compared with September 2016. The decline in this commodity group was mainly attributable to lower prices for electronic and electrical parts (-4.7 percent) and communications and audio and video equipment (-3.2 percent).
The RMPI edged down 0.1 percent in September, following a 0.9 percent increase in August. Of the six major commodity groups, four were down, one was up and one was unchanged.
Crude energy products exerted strong upward pressure on the RMPI, as prices rose 3.9 percent following a 3 percent increase in August. Higher prices for conventional crude oil (+4 percent) were the largest contributor to the increase in this commodity group. The RMPI excluding crude energy products fell 2.8 percent in September.
Animals and animal products (-7 percent), which posted its largest decrease since July 2003 (-12 percent), mostly offset the upward pressure exerted by crude energy products on the RMPI. Lower prices for live animals (-11.7 percent), particularly hogs (-23.3 percent) and, to a lesser extent, cattle and calves (-6.2 percent), were mainly responsible for the decline in animals and animal products.
To a lesser extent, crop products (-1.6 percent) also contributed to the decrease in the RMPI, mainly due to lower prices for wheat (-5.8 percent), canola (including rapeseed) (-3.5 percent) and other crop products (-0.5 percent).
