Canada's industrial product price index increased 0.3 percent in August, following a 1.6 percent decrease in July. Of the 21 major commodity groups, six were up, 13 were down and two were unchanged.
The growth in the IPPI was mostly attributable to higher prices for energy and petroleum products (+2.8 percent). The gain in this commodity group was mainly due to higher prices for motor gasoline (+3 percent). Diesel fuel (+4percent), light fuel oils (+3.7 percent) and jet fuel (+7.6 percent) also contributed to the increase, but to a lesser extent. Higher prices for energy and petroleum products coincided with August shutdowns of petroleum refineries and transportation hubs along the Gulf Coast of the United States in response to Hurricane Harvey. The IPPI excluding energy and petroleum products edged down 0.1 percent.
Higher prices for primary non-ferrous metal products (+2.7 percent) also contributed significantly to the increase in the IPPI. Unwrought precious metals and precious metal alloys (+3.2 percent) were the largest contributor to the price increases in this product group, followed by unwrought copper and copper alloys (+7.7 percent) and unwrought aluminum and aluminum alloys (+5.8 percent). Within the unwrought precious metals and precious metal alloys group, unwrought gold and gold alloys (+3.3 percent), other unwrought precious metals and precious metal alloys (including platinum group metals) (+2.9 percent) and unwrought silver and silver alloys (+3.4 percent) all contributed to the increase.
The increase in the IPPI was primarily moderated by lower prices for meat, fish and dairy products (-1.5 percent). Lower prices for fresh and frozen pork (-5.2 percent) led the decline in this product group. This was the largest decline in fresh and frozen pork since December 2016.
Lower prices for motorized and recreational vehicles (-0.5 percent) also moderated the increase in the IPPI. The decline in this group was mainly the result of lower prices for passenger cars and light trucks (-0.5 percent), motor vehicle engines and motor vehicle parts (-0.5 percent) and aircraft (-0.5 percent). The decrease in prices for motorized and recreational vehicles was closely linked to the appreciation of the Canadian dollar relative to the US dollar.
Prices for primary ferrous metal products (-2 percent) also fell in August. The decrease in this product group was mainly attributable to lower prices for wire and other rolled and drawn steel products (-5.4 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 July to August, the Canadian dollar appreciated 0.7 percent relative to the US dollar. If the exchange rate had remained constant, the IPPI would have increased 0.4 percent instead of 0.3 percent.
The IPPI rose 1.9 percent over the 12-month period ending in August, after increasing 1.3 percent in July.
Compared with August 2016, the increase in the IPPI in August was largely due to higher prices for energy and petroleum products (+8.7 percent), which posted a ninth consecutive year-over-year increase. The increase in this commodity group was mainly attributable to higher prices for motor gasoline (+10.2 percent). Light fuel oil (+9.3 percent), diesel fuel (+8.8 percent) and heavy fuel oils (+13.1 percent) also contributed to the increase, but to a lesser extent.
The meat, fish and dairy products group (+3.8 percent) also exerted upward pressure on the IPPI, mainly due to higher prices for fresh and frozen pork (+8.6 percent). To a lesser extent, fresh and frozen beef and veal (+4.3 percent) and fresh and frozen poultry of all types (+3.8 percent) also contributed to the increase in meat, fish and dairy products.
Pulp and paper products (+6.1 percent) also rose compared to August 2016. The increase in this product group was primarily due to higher prices for wood pulp (+16.4 percent).
Lower prices for motorized and recreational vehicles (-2.3 percent) moderated the year-over-year gain in the IPPI. The decrease in motorized and recreational vehicles was mainly due to lower prices for passenger cars and light trucks (-3 percent) and, to a lesser extent, motor vehicle engines and motor vehicle parts (-1.3 percent).
The RMPI rose 1percent in August, following a 0.9 percent decline the previous month. Of the six major commodity groups, three were up and three were down.
The increase in the RMPI was primarily due to higher prices for crude energy products (+3 percent), particularly conventional crude oil (+3.1 percent). The RMPI excluding crude energy products edged down 0.1 percent.
Higher prices for metal ores, concentrates and scrap (+3.7 percent) also contributed to the increase in the RMPI in August.
The growth in the RMPI was primarily moderated by lower prices for animals and animal products (-3.8 percent), mainly due to hogs (-9.9 percent) and cattle and calves (-5.5 percent).
The RMPI increased 6.1 percent in the 12-month period ending in August, following a 4.2 percent increase in July.
Compared with August 2016, the increase in the RMPI in August was largely due to higher prices for crude energy products (+6.7 percent), mainly conventional crude oil (+6.7 percent).
Prices for metal ores, concentrates and scrap (+9.4 percent) also increased in August as prices rose year over year for the 14th consecutive month.
To a lesser extent, animals and animal products (+5.2 percent) also contributed to the gain in the RMPI, mainly due to higher prices for hogs (+17.8 percent) and fish, shellfish and other fishery products (+10.3 percent).
