Ottawa – Statistics Canada reports that its Machinery and Equipment Price Index (MEPI) decreased 0.7% in the second quarter of 2014 compared with the previous quarter. The import component was down 1.0% over the period, while the domestic component was unchanged.
The Canadian dollar appreciated 1.2% against the US dollar in the second quarter compared with the first quarter of 2014. Variations in exchange rates can have a significant influence on the MEPI given the high weight of imported machinery and equipment in the index.
All industries posted decreases in prices of machinery and equipment purchased in the second quarter. The largest contributor to the total MEPI quarterly decrease was the finance, insurance and real estate industry (-1.0%). Both subsectors of this industry experienced declines as the finance and insurance subcomponent fell 0.8% while the rental and leasing services subcomponent decreased 1.1%. The second largest contributor to the quarterly decline was manufacturing (-0.5%).
Most commodities posted price declines in the second quarter. Among them, trucks, road tractors and chassis (-1.7%), and automobiles, excluding passenger vans (-1.5%) contributed the most to the quarterly decrease of the total MEPI.
Compared with the second quarter of 2013, the total MEPI increased 5.2%, with the import component rising 8.0% and the domestic component up 0.8%. The movement in the import component was partly influenced by the year-over-year change in the Canadian dollar (-6.2%) against the US dollar.