By Ketki Saxena
Investing.com – Statistics Canada announced today that the prices for products sold by manufacturers operating in Canada, measured by the Industrial Product Price Index (IPPI) declined 1.2% month over month in August. Year over year, the IPPI increased 10.6%.
The Raw Materials Price Index (RMPI), which measures the prices of raw materials purchased by manufacturers operating in Canada, as measured by declined 4.2% on a monthly basis in August and was up 17.6% year over year.
Industrial Product Price Index
The IPPI’s 1.2% decline in August market a third consecutive monthly decrease, moderated largely by easing prices for energy and petroleum products, which fell 6.5% in August. Prices for refined petroleum energy products (-7.0%) fell for a second consecutive month, but remain 51.1% higher than a year ago. Falling prices for refined petroleum products are linked to lower prices for crude oil, which fell 9.6% in August driven by increased global production, ongoing concerns of demand destruction fuelled by aggressive moves from global central banks, and releases from the US’s Strategic Petroleum Reserve.
Prices also recorded a steep decline, falling by 19.3% as natural gas prices moderated. StatsCan notes that the 19.4% drop in natural gas prices in Canada was a uniquely Canadian phenomenon, as prices remains hgih globally. However, fertilizer prices remained up 42.8% year over year and 95.8% compared with January 2020, StatsCan notes, as high natural gas prices led European fertilizer plants to close or reduce output
The price of softwood lumber fell 7.5% in August driven by higher interest rates and a slowing US housing market. Prices for primary ferrous metal products were down 2.1% in August, moderated by declining prices for steel as demand slowed in China amidst a softening property market.
Raw Materials Price Index
The RMPI’s 4.2% month over month in August was also driven by lower prices for crude energy products (-9.6%). However, the RMPI was up 17.6% compared with August 2021.
Moderating prices for crop products (-3.5%) also affected the decline, as the prices for grains (except wheat) fell 7.2% in August, while the price of wheat decreased 6.6% following the resumption of exports from the Black Sea ports in Ukraine.
Prices for gold, silver, and platinum group metal ores and concentrates (+4.7) meanwhile increase, with StatsCan noting that the “Short-term price movement for gold and silver in August may have been influenced by market participants covering short positions, as well as expectations of softening US inflation.”