Prices of products sold by Canadian manufacturers, as measured by the Industrial Product Price Index (IPPI), edged up 0.1% in September. Higher prices for chemicals and chemical products and energy and petroleum products were largely offset by lower prices for primary non-ferrous metal products. Prices for raw materials purchased by Canadian manufacturers, as measured by the Raw Materials Price Index (RMPI), decreased 0.9%, primarily due to lower prices for crude energy products.
Industrial Product Price Index, monthly change
The IPPI edged up 0.1% in September, after falling 0.5% in August. Of the 21 major commodity groups, 10 were up, 7 were down and 4 were unchanged.
Chemicals and chemical products (+1.6%) contributed the most to the growth in the IPPI in September, mostly on account of higher prices for petrochemicals (+6.3%). Increased demand for ethylene on the US Gulf Coast was the main reason for higher prices for petrochemicals. Ammonia and chemical fertilizers (+3.9%) and other basic inorganic chemicals (+1.4%) also drove up the prices of chemicals and chemical products.
Prices for energy and petroleum products (+0.8%), particularly diesel fuel (+2.7%) and light fuel oils (+1.7%), also contributed significantly to the increase in the IPPI. However, lower prices for motor gasoline (-0.5%) limited the increase in energy and petroleum products. The IPPI excluding energy and petroleum products also rose 0.1%.
Primary non-ferrous metal products (-1.6%), which were down for the third consecutive month, mostly offset the increase in the IPPI. Lower prices for unwrought precious metals and precious metal alloys (-1.9%) and unwrought aluminum and aluminum alloys (-4.3%) were mainly responsible for the decline in this commodity group.
Meat, fish, and dairy products were down 0.7% in September, following a 2.1% decline in August. This decrease was mainly due to lower prices for fresh and frozen beef and veal (-2.4%), as well as processed meat products, other meats and animal by-products (-1.9%).
Some IPPI prices are reported in US dollars and converted to Canadian dollars using the average monthly exchange rate. Consequently, any change in the value of the Canadian dollar relative to the US dollar will affect the level of the index. From August to September, the Canadian dollar was unchanged relative to the US dollar.
Industrial Product Price Index, 12-month change
Compared with the same month a year earlier, the IPPI rose 6.2% in September, following a 5.7% increase in August.
Compared with September 2017, the growth in the IPPI was mainly attributable to higher prices for energy and petroleum products (+19.2%), which have been increasing year over year since December 2016. Higher prices for motor gasoline (+16.0%), light fuel oils (+27.4%), and diesel fuel (+26.5%) were mostly behind this gain. The IPPI excluding energy and petroleum products rose 4.3% year over year.
Pulp and paper products (+18.0%) and motorized and recreational vehicles (+3.9%) also contributed to the rise in the IPPI compared with September 2017, though to a lesser extent.
The gain in pulp and paper products was mainly attributable to higher prices for wood pulp (+27.0%) and newsprint (+33.3%). Growth in motorized and recreational vehicles was essentially due to higher prices for passenger cars and light trucks (+2.4%), motor vehicle engines and motor vehicle parts (+4.5%), and aircraft (+7.9%).
Chemicals and chemical products (+7.2%) saw year-over-year growth for a fourth consecutive month in September, driven by higher prices for petrochemicals (+29.6%).
Primary non-ferrous metal products (-2.6%), particularly unwrought precious metals and precious metal alloys (-7.3%), slightly moderated the growth in the IPPI compared with September 2017.
Raw Materials Price Index, monthly change
The RMPI fell 0.9% in September, after decreasing 4.8% in August. Of the six major commodity groups, five were down and one was up.
Crude energy products were largely responsible for the decrease in the RMPI in September, with prices falling 0.8%, following a 5.8% decline in August. This decrease was mainly led by lower prices for conventional crude oil (-0.7%). The RMPI excluding crude energy products fell 1.0%.
Metal ores, concentrates, and scrap (-1.1%) was another key contributor to the decline in the RMPI, particularly due to lower prices for waste and scrap of metal (-5.2%). This was the third consecutive monthly decrease in this commodity group.
Animals and animal products were down 1.2% in September, after decreasing 7.3% the previous month. Prices for live animals (-2.2%), especially hogs (-4.5%), were primarily responsible for the decline in this commodity group.
Raw Materials Price Index, 12-month change
The RMPI rose 14.6% over the 12-month period ending in September, following a 15.4% increase in August.
The growth in the RMPI compared with September 2017 was almost entirely led by higher prices for crude energy products (+33.8%), particularly conventional crude oil (+35.0%). Year over year, the RMPI excluding crude energy products rose 1.1%.
Logs, pulpwood, natural rubber and other forestry products (+7.7%), as well as crop products (+1.9%), also rose year over year in September.