The Canadian Industrial Product Price Index increased 0.3 percent in March, largely as a result of higher prices for energy and petroleum products. The Raw Materials Price Index declined 0.9 percent in March, largely due to lower prices for crude energy products. The increase in IPPI in March (+0.3 percent) followed a 1.8 percent February gain. Of the 21 commodity groups, 11 were up, 7 were down and 3 were unchanged.

The main contribution to the increase in March was energy and petroleum products (+1.8 percent). The gain was mainly led by higher prices for motor gasoline (+5.2 percent), while lower prices for diesel fuel (-0.9 percent) slightly moderated the gain. The IPPI excluding energy and petroleum products was unchanged, after five consecutive monthly increases.

Also contributing to the gain were higher prices for motorized and recreational vehicles (+0.3 percent) as well as chemicals and chemical products (+0.2 percent).

The gain in motorized and recreational vehicles was led by higher prices for passenger cars and light trucks (+0.5 percent) and, to a lesser extent, motor vehicle engines and motor vehicle parts (+0.4 percent) as well as aircraft (+0.7 percent).

The rise in chemicals and chemical products was mainly a result of higher prices for petrochemicals (+1.9 percent) and ammonia and chemical fertilizers (+1.7 percent), while lower prices for plastic resins (-1.5 percent) moderated the gain in the commodity group.

The increase in the IPPI was largely moderated by a 1.1 percent decline for primary non-ferrous metal products. The main reason for the decline in this commodity group was lower prices for unwrought precious metals and precious metal alloys (-3.2 percent) and, to a lesser extent, other unwrought non-ferrous metals and non-ferrous metal alloys (-2.4 percent). Moderating the decline in this commodity group were higher prices for unwrought copper and copper alloys (+3.6 percent).

Also putting downward pressure on the IPPI were lower prices for primary ferrous metal products (-1.1 percent) and, to a lesser extent, meat, fish and dairy products (-0.2 percent).

The decline in primary ferrous metal products was mainly attributable to lower prices for iron and steel basic shapes (-1.4 percent), as well as wire and other rolled and drawn steel products (-1.8 percent).

The decline in meat, fish and dairy products was mainly a result of lower prices for fresh and frozen pork (-2.7 percent), while higher prices for fresh and frozen beef and veal (+0.7 percent) partly moderated the decline. The price of fresh and frozen pork has declined 16.3 percent since peaking in July 2014.

Some IPPI prices are reported in US dollars and are 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 February to March, the Canadian dollar depreciated 1 percent relative to the US dollar. If the exchange rate had remained constant, the IPPI would have increased 0.1 percent instead of increasing 0.3 percent.

The IPPI decreased 1.8 percent over the 12-month period ending in March, after decreasing 1.5 percent in February.

Compared with the same period last year, the decline of the IPPI was largely attributable to energy and petroleum products (-23.5 percent). Motor gasoline (-23.9 percent) and, to a lesser extent, diesel fuel (-24.3 percent) and light fuel oils (-21.3 percent) were the main reasons for the decline in this commodity group. Excluding energy and petroleum products, the IPPI rose 2.8 percent compared with the same month last year.

To a lesser extent, chemicals and chemical products (-6.8 percent) also contributed to the decline in the IPPI. The decrease was primarily a result of lower prices for aromatic hydrocarbon gases (-37.8 percent) as well as liquefied refinery gases, and acyclic hydrocarbons not elsewhere classified (-25.7 percent).

The year-over-year decline in the IPPI was moderated by higher prices for motorized and recreational vehicles (+9.3 percent). The increase was mainly attributable to higher prices for passenger cars and light trucks (+9.9 percent) and, to a lesser extent, motor vehicle engines and motor vehicle parts (+6.3 percent) as well as aircraft (+15.1 percent).

Also moderating the year-over-year decline in the IPPI were higher prices for meat, fish and dairy products (+4.6 percent), specifically fresh and frozen beef and veal (+24.4 percent). Moderating the increase in this group were lower prices for fresh and frozen pork (-8.6 percent), which saw its first year-over-year decrease since March 2013. Year-over-year prices for meat, fish and dairy products have not declined since July 2010.

Raw Materials Price Index

The RMPI fell 0.9 percent in March following a 5.9 percent gain in February. Of the six commodity groups, four were up, one was down and one was unchanged. The decline in the RMPI was largely a result of lower prices for crude energy products (-2.8 percent), specifically conventional crude oil (-2.9 percent). The RMPI excluding crude energy products increased 0.4 percent.

Moderating the decline in the RMPI were higher prices for animals and animal products (+0.5 percent) as well as metal ores, concentrates and scrap (+0.3 percent).

Higher prices for cattle and calves (+2.4 percent) were the main reason for the increase for animals and animal products, while lower prices for hogs (-1.9 percent) moderated the gain.

The RMPI fell 23.3 percent over the 12-month period ending in March, following a 21.9 percent decline in February.

The year-over-year decline in the RMPI was almost entirely attributable to lower prices for crude energy products (-42.8 percent), specifically conventional crude oil (-43.8 percent). The RMPI excluding crude energy products decreased 0.5 percent year over year.

Also contributing to the decline, but to a much lesser extent, was metal ores, concentrates and scrap (-2.4 percent).