Canada's industrial product price index declined 0.6 percent in March, according to Statistics Canada. The decline was led by lower prices for motorized and recreational vehicles, while higher prices for energy and petroleum products largely moderated the fall. The Raw Materials Price Index increased 4.5 percent, led by higher prices for crude energy products.
The IPPI declined 0.6 percent in March, after falling 1 percent in February. Of the 21 major commodity groups, 18 were down and three were up.
The motorized and recreational vehicles commodity group (-2.9 percent) was the main reason for the decline in the IPPI in March. Lower prices for passenger cars and light trucks (-3 percent), motor vehicle engines and motor vehicle parts (-2.1 percent) and aircraft (-3.9 percent) were the main reasons 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.
Also contributing to the decline in the IPPI were lower prices for primary non-ferrous metal products (-1.1 percent). Lower prices for unwrought aluminum and aluminum alloys (-3.7 percent), unwrought precious metals and precious metal alloys (-0.8 percent) and other unwrought non-ferrous metals and non-ferrous metal alloys (-2.9 percent) were the main reasons for the decline. Higher prices for unwrought copper and copper alloys (+2.9 percent) helped moderate the fall in this commodity group.
Largely moderating the decline in the IPPI were higher prices for energy and petroleum products (+5.2 percent). The increase was led by prices for motor gasoline (+10.9 percent), which posted their largest gain since February 2015, when prices rose 13.2 percent. To a lesser extent, light fuel oils (+5.5 percent) and diesel fuel (+3.5 percent) also contributed to the increase in March. The IPPI excluding energy and petroleum products posted its largest decline since May 2009, falling 1.3 percent in March.
Some IPPI prices are reported in U.S. 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 U.S. dollar will affect the level of the index. From February to March 2016, the Canadian dollar appreciated 4.1 percent relative to the U.S. dollar. If the exchange rate had remained constant, the IPPI would have increased 0.3 percent instead of decreasing 0.6 percent.
The IPPI declined 2.1 percent over the 12-month period ending in March, after declining 1.3 percent in February.
The main reason for the decline in the IPPI was lower prices year over year for energy and petroleum products (-18.8 percent). Motor gasoline (-15 percent), diesel fuel (-23.6 percent), light fuel oils (-22 percent) and heavy fuel oils (-32.9 percent) contributed to the decline in prices for energy and petroleum products. The IPPI excluding energy and petroleum products increased 0.5 percent from the same month last year.
Lower prices for both primary ferrous metal products (-11.9 percent) and primary non-ferrous metal products (-3.7 percent) also contributed to the year-over-year decline in the IPPI.
Lower prices for iron and steel basic shapes (-14.8 percent) and wire and other rolled and drawn steel products (-10.1 percent) were the main reasons for the decline in primary ferrous metal products. The decline in primary non-ferrous metal products was led by lower prices for unwrought copper and copper alloys (-12.8 percent), unwrought aluminum and aluminum alloys (-7.8 percent), and other unwrought non-ferrous metals and non-ferrous metal alloys (-7.1 percent).
Moderating the year-over-year decline in the IPPI were higher prices for motorized and recreational vehicles (+3 percent), specifically higher prices for passenger cars and light trucks (+4 percent) and aircraft (+5.2 percent).
Raw Materials Price Index
The RMPI increased 4.5 percent in March, following a gain of 0.7 percent in February. Of the six major commodity groups, three were up and three were down.
The increase in the RMPI was mainly attributable to higher prices for crude energy products (+14.3 percent), specifically conventional crude oil (+15.1 percent). The RMPI excluding crude energy products declined 0.3 percent.
Metal ores, concentrates and scrap (+0.7 percent) also contributed to the increase in the RMPI, but to a much lesser extent.
Slightly moderating the increase in the RMPI were lower prices for animals and animal products (-1 percent), specifically cattle and calves (-1.8 percent) and hogs (-2.5 percent).
The RMPI declined 9.7 percent over the 12-month period ending in March.
Lower prices for crude energy products (-18.6 percent), specifically conventional crude oil (-19.2 percent), were largely responsible for the decrease. The RMPI excluding crude energy products declined 3.8 percent from the same month last year.
To a lesser extent, lower prices for animals and animal products (-5.5 percent) also contributed to the year-over-year decline in the RMPI. The decline in the animals and animal products commodity group was led by cattle and calves (-15.6 percent), while higher prices for hogs (+4.8 percent) moderated the fall.
