Ottawa - Statistics Canada reports that the Industrial Product Price Index (IPPI) declined 0.3% in October 2013, mainly because of lower prices for petroleum and coal products. The Raw Materials Price Index (RMPI) fell 2.3%, led by mineral fuels.
The IPPI posted a second consecutive decrease in October, following a 0.2% decline in September. Of the 21 major product groups, eight were up, five were down, and eight were unchanged.
The Petroleum and coal products sector (-2.4%) was the main contributor to the downward movement of the index, mostly because of lower prices for gasoline (-4.5%), which registered its largest decrease since November 2012. In general, the decline in gasoline prices partly reflects the weakening of demand during autumn. The IPPI excluding petroleum and coal products edged up 0.1% in October.
To a lesser extent, fruit, vegetables and feeds (-0.4%) also contributed to the decrease in the IPPI, mainly because of lower prices for feeds (-2.0%).
Conversely, the decline of the IPPI was moderated in part by lumber and other wood products (+0.6%), largely as a result of higher prices for lumber and ties. Primary metal products (+0.3%) also increased, specifically copper and copper alloy products, aluminum products as well as nickel products.
Industrial Product Price Index, 12-month change
The IPPI rose 0.8% in the 12-month period ending in October, after posting a 1.0% advance in September.
Compared with October 2012, the growth of the IPPI was mainly attributable to motor vehicles and other transportation equipment (+3.2%). The increase in this commodity group was largely because of a 4.7% year-over-year depreciation of the Canadian dollar relative to the US dollar.
Some Canadian producers who export their products report their prices in US dollars. Consequently, the 4.7% decrease in the value of the Canadian dollar relative to the US dollar may have had the effect of increasing the IPPI. Without the measurable effect of the exchange rate, the index would have declined 0.4% instead of rising 0.8%.
Compared with October 2012, lumber and other wood products (+4.8%) also contributed to the increase of the IPPI, primarily as a result of higher prices for lumber and ties (+14.9%). On a year-over-year basis, lumber and ties has not declined since February 2012.
To a more modest extent, pulp and paper products (+3.1%) and electrical and communications products (+2.9%) also contributed to the year-over-year advance of the IPPI.
Compared with October 2012, the advance of the IPPI was moderated by primary metal products (-4.8%), specifically other non-ferrous metal products, nickel products as well as copper and copper alloy products. The decline in other non-ferrous metal products was mainly a result of lower prices for silver and platinum and gold and gold alloys in primary form.
Raw Materials Price Index, monthly change
The RMPI fell 2.3% in October, representing the second consecutive decline. It was also the largest decrease since June 2012. Of the seven major product groups, two were up, four were down, and one was unchanged.
The decline of the index was mainly attributable to lower prices for mineral fuels (-4.1%), specifically crude oil (-4.2%). The decrease in crude oil prices resulted in part from high inventories in North America and lower demand for petroleum products. The RMPI excluding mineral fuels was down 0.5% in October.
To a lesser extent, vegetable products (-3.0%) and animals and animal products (-1.0%) also exerted downward pressure on the RMPI.
Lower prices for grain (-5.9%), particularly corn (-12.9%), was the main factor in the decline of the vegetable products group, while hogs-swine for slaughter (-2.9%) was largely responsible for the decrease in animals and animal products.
Conversely, the downward movement of the RMPI was moderated slightly by non-ferrous metals (+1.1%), led by higher prices for copper concentrates (+2.3%).
Raw Materials Price Index, 12-month change
The RMPI rose 0.4% in the 12-month period ending in October, after posting a 2.3% gain in September.
Compared with October 2012, the advance of the RMPI was primarily a result of higher prices for mineral fuels (+3.6%), specifically crude oil (+3.6%). The RMPI excluding mineral fuels was down 2.4% on a year-over-year basis.
Animals and animal products (+5.5%) was also a significant factor in the year-over-year advance of the RMPI, mostly because of higher prices for hogs-swine for slaughter (+19.7%) as well as for cattle and calves for slaughter (+8.2%).
Among other commodity groups that contributed to the year-over-year increase in the RMPI were wood products (+8.7%) and ferrous materials (+9.9%).
Compared with the same month one year earlier, the advance of the RMPI was moderated by non-ferrous metals (-8.5%) and vegetable products (-16.2%).