Ottawa, ON — The Machinery and Equipment Price Index (MEPI) fell by 2.3% in the fourth quarter, Statistics Canada reports. The import component fell by 3.4% over the same period, while the domestic component declined by 0.3%. The total MEPI was down by 8.7% compared with the fourth quarter of 2008, with the import component declining by 13.0%, while the domestic component fell by 0.7%.
All industries recorded decreases in prices of machinery and equipment purchased in the fourth quarter. The manufacturing sector (-2.9%) contributed the most to the total MEPI quarterly decline. Among the sector’s subcomponents, the largest contributors to the quarterly decrease were transportation equipment manufacturing (-2.9%), primary metal and fabricated metal product manufacturing (-2.9%) and paper manufacturing (-2.6%). The second largest contributor to the total quarterly decrease was other services (excluding public administration), which fell 2.1%.
Among commodities, price decreases for computers and peripherals (-5.4%) and other industry specific machinery (-3.5%) were the largest contributors to the quarterly decline.
The Canadian dollar appreciated by 3.9% against the US dollar in the fourth quarter of 2009, while, year over year, it gained 14.8% against its US counterpart. Variations in exchange rates can have a strong influence on the MEPI given the high weight that imported machinery and equipment have in the index.