The following is the text of the industrial product and raw material prices report as reported by Statistics Canada.
The Industrial Product Price Index (IPPI) was down 0.3% in November compared with October, mainly as a result of lower prices for petroleum and coal products. The Raw Materials Price Index (RMPI) fell 1.9%, primarily because of lower prices for mineral fuels, specifically crude oil.
Industrial Product Price Index, monthly change
The IPPI declined for the second consecutive month in November. The decrease of the index accelerated slightly in November, as the decline was 0.1% in October. The IPPI has decreased in six of the last seven months.
The decline of the IPPI in November was mainly attributable to petroleum and coal products (-2.8%), where a majority of the products, especially gasoline (-4.3%) and fuel oils and other fuel (-2.7%), posted price decreases. The IPPI excluding petroleum and coal products rose 0.2%.
Among other groups that decreased was primary metal products (-0.6%), particularly copper and copper alloy products and nickel products.
The IPPI decline was moderated by an increase in motor vehicles and other transportation equipment (+0.8%), primarily because of higher prices for motor vehicles. The decrease of the Canadian dollar against the US dollar in November was largely responsible for this advance.
Some Canadian producers who export their products report their prices in US dollars. Consequently, the 1.0% depreciation of the Canadian dollar relative to the US dollar in November could have the effect of increasing the corresponding prices in Canadian dollars. Without the measurable impact of the exchange rate, the IPPI would have fallen 0.5% instead of 0.3%.
Lumber and other wood products (+0.8%) also contributed to moderating the IPPI decline in November. The increase was mostly a result of lumber and ties.
Industrial Product Price Index, 12-month change
Compared with November 2011, the IPPI was down 0.5%, its fourth consecutive year-over-year decrease.
The downward pressure on the index came mainly from petroleum and coal products (-2.6%), notably as a result of lower prices for fuel oils and other fuel. The IPPI excluding petroleum and coal products declined 0.2% on a year-over-year basis.
Primary metal products (-3.6%) also contributed to the year-over-year IPPI decrease. Lower prices for aluminum products and other non-ferrous metal products were responsible for this decline.
Motor vehicles and other transportation equipment (-1.3%) posted its third consecutive year-over-year decrease. The decline was primarily a result of the appreciation of the Canadian dollar against the US dollar compared with November 2011.
The 2.9% year-over-year increase in the value of the Canadian dollar relative to the US dollar may decrease the IPPI. Without the measurable impact of the exchange rate, the index would have edged up 0.1% instead of falling 0.5%.
The year-over-year decline in the IPPI was moderated mostly by lumber and other wood products (+8.6%). Also up were fruit, vegetable, feeds and other food products (+3.2%) as well as meat, fish and dairy products (+1.1%).
Raw Materials Price Index, monthly change
In November, the RMPI (-1.9%) posted its first decrease in five months, with three of the seven commodity groups down.
The decline of the index was mainly attributable to lower prices for mineral fuels (-3.1%), specifically crude oil (-3.4%), which decreased for the first time since June. The RMPI excluding mineral fuels fell 0.7% in November.
Downward pressure on the RMPI was also exerted by non-ferrous metals (-3.2%), especially copper and nickel concentrates (-6.0%) and non-ferrous metal scrap (-3.4%).
Conversely, the RMPI decline was moderated primarily by animals and animal products (+1.7%) and ferrous materials (+1.5%).
Raw Materials Price Index, 12-month change
Compared with November 2011, the RMPI was down 8.2%, its ninth consecutive year-over-year decrease.
The decline of the index was almost entirely a result of mineral fuels, specifically crude oil (-15.9%). The RMPI excluding mineral fuels fell 0.7% on a year-over-year basis.
The RMPI was also pulled downward by non-ferrous metals (- 3.2%), as a result of lower prices for radioactive concentrates (-22.7%).
The year-over-year decline of the RMPI was moderated slightly by wood products (+5.1%) and vegetable products (+3.4%).
Note to readers
All data in this release are seasonally unadjusted and usually subject to revision for a period of six months (for example, when the July index is released, the index for the previous January becomes final).
The Industrial Product Price Index (IPPI) reflects the prices that producers in Canada receive as the goods leave the plant gate. It does not reflect what the consumer pays. Unlike the Consumer Price Index, the IPPI excludes indirect taxes and all the costs that occur between the time a good leaves the plant and the time the final user takes possession of it, including the transportation, wholesale, and retail costs.
Canadian producers export many goods. They often indicate their prices in foreign currencies, especially in US dollars, which are then converted into Canadian dollars. In particular, this is the case for motor vehicles, pulp, paper and wood products. Therefore, a rise or fall in the value of the Canadian dollar against its US counterpart affects the IPPI. But the conversion into Canadian dollars only reflects how respondents provide their prices. This is not a measure that takes the full effect of exchange rates into account.
The conversion of prices received in US dollars is based on the average monthly exchange rate (noon spot rate) established by the Bank of Canada, and it is available on CANSIM in table 176-0064 (series v37426). Monthly and annual variations in the exchange rate, as described in the release, are calculated according to the indirect quotation of the exchange rate (for example, CAN$1 = US$X).
The Raw Materials Price Index (RMPI) reflects the prices paid by Canadian manufacturers for key raw materials. Many of those prices are set on the world market. However, as few prices are denominated in foreign currencies, their conversion into Canadian dollars has only a minor effect on the calculation of the RMPI.