Machinery and Equipment Price Index continues its decline
Ottawa, ON -- The Machinery and Equipment Price Index (MEPI) declined by 0.8% in the second quarter of 2011 compared with the previous quarter, according to Statistics Canada.
Ottawa, ON — The Machinery and Equipment Price Index (MEPI) declined by 0.8% in the second quarter of 2011 compared with the previous quarter, according to Statistics Canada.
The import component declined by 1.4% over this period, while the domestic series was unchanged. Compared with the second quarter of 2010, the total MEPI decreased by 2.5%, with the import component declining 4.4%, while the domestic component increased by 0.7%.
Except for fishing, hunting and trapping (+0.2%) and warehousing and storage (+0.1%), all other industries posted decreases in the prices of machinery and equipment purchased in the second quarter. The largest contributor to the total MEPI decline were the finance, insurance and real estate industries (-1.0%), led by the real estate and rental and leasing services subcomponent (-1.0%).
The second largest contributor to the quarterly decline of the total MEPI were manufacturing industries (-0.7%), led by a price decline in transportation equipment manufacturing (-0.5%) and a 0.7% decrease in both the primary metal and fabricated metal product manufacturing and the paper manufacturing sectors.
Almost all commodities posted price decreases in the second quarter. Among these, computers and peripherals equipment such as terminals, printers and storage devices (-3.5%) and other industry specific machinery (-1.3%) contributed the most to the quarterly decline of the total MEPI.
The Canadian dollar appreciated by 1.9% against the US dollar in the second quarter compared with the previous quarter and also gained 6.2% year over year. Variations in exchange rates can have a strong influence on the MEPI given the high weight that imported machinery and equipment has in the index.