Canada's Industrial Product Price Index grew 0.2% in November as Raw Materials Price Index jumped 3.8%, both led by higher petroleum prices
January 5, 2012
– Between October and November, the Industrial Product Price Index (IPPI) increased slightly, by 0.2%, and the Raw Materials Price Index (RMPI) rose 3.8%, both led by higher petroleum prices.
The IPPI posted a slight increase in November, following a 0.1% decline in October. The index's advance was primarily a result of petroleum and coal products (+1.1%) and, to a lesser extent, motor vehicles and other transportation equipment (+0.3%).
The increase of petroleum and coal products in November was mainly a result of fuel oil and other fuels (+5.5%) and other petroleum and coal products (+1.9%). However, gasoline prices were down 3.6%.
The November increase in prices for motor vehicles and other transportation equipment was mainly attributed to a 0.6% decline in the value of the Canadian dollar relative to the US dollar.
The advance of the IPPI in November was moderated slightly by eight product groups, including fruit, vegetables and feeds; pulp and paper products; lumber and other wood products; and primary metal products.
Primary metals (-0.1%) decreased for a third consecutive month in November. Lower prices for iron and steel (-1.5%), aluminum (-2.1%) and nickel (-4.8%) resulted in part from weaker demand in Asia and Europe. However, these declines were offset by higher prices for precious metals and copper.
Excluding petroleum and coal prices, the IPPI would have risen 0.1% in November, following a 0.3% decrease in October.
Some Canadian producers who export their products are generally paid on the basis of prices set in US dollars. Consequently, the depreciation of the Canadian dollar in relation to the US dollar in November had the effect of increasing the corresponding prices in Canadian dollars. Without the impact of the exchange rate, the IPPI would have remained unchanged instead of rising 0.2%.
The IPPI rose 4.2% in November compared with the same month in 2010, a slowdown from the 5.4% growth observed in September and 4.7% in October. In November, 18 of the 21 major commodity aggregations were up, 1 less than in October.
Relative to November 2010, the IPPI was pushed upward mainly by higher prices for petroleum and coal products (+21.8%). More modest contributions were made by chemical products (+6.7%), motor vehicles and other transportation equipment (+1.5%), fruit, vegetables and feeds (+4.1%) and meat, fish and dairy products (+3.5%).
Year over year, the increase in petroleum and coal products was smaller than the 30.2% observed in September and 25.2% in October.
If petroleum and coal prices were excluded, year over year, the IPPI would have risen 2.1% in November. This was comparable to the growth rate of 2.2% in October.
In November, the 1.3% year-over-year decline in the value of the Canadian dollar relative to the US dollar had a positive effect on the advance of the IPPI. If the exchange rate had been excluded, the IPPI would have increased 3.9% instead of 4.2%.
Raw Materials Price Index, monthly change
In November, the RMPI rose 3.8%, following a 1.0% decline in October. It was led by higher prices for mineral fuels (+8.2%) and non-ferrous metals (+0.9%).
Among mineral fuels, crude oil increased 8.9%, while declines were observed for coal (-1.4%) and natural gas (-0.6%).
In November, precious metals increased 5.6% and copper concentrates rose 2.8%. However, the upward pressure was moderated by nickel concentrates (-4.8%), other base metals (-4.4%) and non-ferrous metal scrap (-2.4%), among others.
RMPI growth in November was dampened by lower prices for vegetable products (-2.5%), including rubber and natural gums (-15.2%), corn (-5.9%) and soybeans (-3.9%).
Without mineral fuels, the RMPI would have posted a 0.3% decline in November, following decreases of 1.1% in September and 2.7% in October.
Compared with the same month in 2010, the RMPI rose 11.7% in November, which was comparable to the 11.4% increase in October. The main factors in the year-over-year increase in the RMPI in November were higher prices for mineral fuels (+20.5%), animals and animal products (+17.7%) and vegetable products (+6.7%). The advance was moderated by non-ferrous metals (-5.3%), which had also posted a decrease in October (-4.2%).
Year over year, if mineral fuels were excluded, the RMPI would have risen 4.1% in November. It was the fifth consecutive slowdown in the growth rate since the 19.4% increase in June.