Canada's industrial product price index increased 0.4 percent in December, according to Statistics Canada. Of the 21 major commodity groups, six were up, 10 were down and five were unchanged.
Prices for energy and petroleum products (+2.7 percent) were largely responsible for January’s gain in the IPPI. The increase was mainly due to higher prices for motor gasoline (+3 percent) and heavy fuel oils (+8.6 percent). The price of lubricants and other petroleum refinery products (+4.5 percent), diesel fuel (+1.3 percent) and jet fuel (+4.5 percent) also contributed to the increase in energy and petroleum products. The IPPI excluding energy and petroleum products edged up 0.1 percent.
Meat, fish and dairy products (+2.2 percent) also contributed significantly to the increase in the IPPI. Higher prices for fresh and frozen pork (+5.9 percent), fresh and frozen beef and veal (+5.1 percent) and processed meat products, other meats and animal by-products (+2 percent) were the main cause for the growth.
Primary non-ferrous metal products were up 0.9 percent in January, primarily due to higher prices for unwrought precious metals and precious metal alloys (+1.7 percent) and unwrought aluminum and aluminum alloys (+1.6 percent).
The increase in the IPPI was primarily moderated by lower prices for motorized and recreational vehicles (-0.6 percent). The decline in this group was mainly the result of lower prices for passenger cars and light trucks (-0.7 percent), motor vehicle engines and motor vehicle parts (-0.5 percent) and aircraft (-0.9 percent). The decrease in prices for motorized and recreational vehicles was closely linked to the gain in the Canadian dollar relative to the U.S. dollar.
Some IPPI prices are reported in U.S. dollars and converted to Canadian dollars using the average monthly exchange rate. As a result, any change in the value of the Canadian dollar relative to the U.S. dollar will affect the level of the index. From December to January, the Canadian dollar rose 1 percent relative to the U.S. dollar. If the exchange rate had remained constant, the IPPI would have increased 0.7 percent instead of 0.4 percent.
The IPPI increased 2.3 percent over the 12-month period ending in January, after posting an identical increase in December.
Compared with January 2016, the growth in the IPPI was mainly attributable to higher prices for energy and petroleum products (+22.7 percent), which registered their largest year-over-year increase since November 2011. Motor gasoline (+22 percent), light fuel oil (+35.7 percent), diesel fuel (+27.3 percent) and heavy fuel oil (+52.7 percent) were the biggest contributors to higher prices for energy and petroleum products. The IPPI excluding energy and petroleum products declined 0.2 percent in January.
To a lesser extent, primary non-ferrous metal products (+7.7 percent) also contributed to the year-over-year increase in the IPPI. Higher prices for other unwrought non-ferrous metals and non-ferrous metal alloys (+32 percent), unwrought precious metals and precious metal alloys (+4.6 percent) and unwrought copper and copper alloys (+18.7 percent) led the gain in this commodity group.
Lower prices for motorized and recreational vehicles (-5 percent) primarily moderated the year-over-year increase in the IPPI. Prices for passenger cars and light trucks (-5.3 percent) and, to a lesser extent, motor vehicle engines and motor vehicle parts (-4.1 percent) and aircraft (-6.3 percent) were mainly behind the decline in this commodity group.
The meat, fish and dairy product group (-1.5 percent) also exerted downward pressure on the IPPI, as a result of lower prices for fresh and frozen beef and veal (-9.4 percent) and, to a lesser extent, fresh and frozen poultry of all types (-3 percent) and fresh and frozen pork (-1.8 percent).
Raw Materials Price Index
The RMPI increased 1.7 percent in January, following a 6.5 percent gain in December. Of the six major commodity groups, five were up and one was down.
The increase in the RMPI was mainly attributable to higher prices for animals and animal products (+4.9 percent), specifically hogs (+16 percent) as well as cattle and calves (+7.6 percent). This was the largest increase in the animals and animal products group since July 2014, when prices rose 4.9 percent.
Prices for metal ores, concentrates and scrap (+1.8 percent), up for a third consecutive month, also contributed to the gain in the RMPI in January.
Crude energy products rose 0.9 percent in January, following a 14.2 percent increase the previous month. The main reason for this gain was higher prices for conventional crude oil, which rose 1 percent. The RMPI excluding crude energy products was up 2.4 percent.
The RMPI posted a 23 percent gain over the 12-month period ending in January, after rising 17.2 percent in December.
Compared with January 2016, the increase in the RMPI was mostly due to higher prices for crude energy products (+57.8 percent), particularly conventional crude oil (+61 percent). It was the highest year-over-year increase for crude energy products since January 2010.
Prices for metal ores, concentrates and scrap (+17.7 percent) also contributed to the year-over-year increase of the RMPI.
Compared with January 2016, the growth in the RMPI was primarily moderated by lower prices for animals and animal products (-2.6 percent), especially cattle and calves (-13.7 percent).
