Economic and industry statisticsEconomy and markets
Canadian producer and raw-material prices rise in September
Statistics Canada reported faster monthly increases in factory-gate and input prices, led by energy, petroleum and crude materials.
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- First published on EPC Feed
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Statistics Canada’s September price release showed a broad monthly increase in both prices received by manufacturers and prices paid for raw materials. The Industrial Product Price Index rose 2.0 per cent from August and 14.5 per cent over twelve months. The Raw Materials Price Index increased 4.8 per cent month to month and 27.0 per cent year over year. These measures track different points in the supply chain: the first concerns products leaving Canadian factories, while the second measures key raw materials purchased by manufacturers.
Energy products drove much of the monthly movement in the industrial product index. Prices for the energy and petroleum product group increased 12.1 per cent in September after rising 3.7 per cent in August. Refined petroleum energy products were up 13.7 per cent. Within that group, diesel prices rose 18.4 per cent, finished motor gasoline 7.8 per cent and light fuel oils 15.4 per cent. The report attributed the increase partly to resumed conflict between the United States and Iran in August, which continued to affect energy and petroleum prices in September. That is Statistics Canada’s stated context; the release does not quantify the separate contribution of geopolitical events to each product price.
Other manufactured product categories also moved. Prices for chemicals and chemical products increased 3.8 per cent after a 0.3 per cent decline in the preceding month. Petrochemicals rose 9.7 per cent and plastic resins increased 11.0 per cent. Fertilizers, pesticides and other chemical products were up 4.1 per cent. The index excluding energy and petroleum products edged up 0.3 per cent. This comparison shows that September’s factory-gate increase was concentrated in energy-related products, although other categories also rose.
The raw-material index showed an even larger monthly increase. Crude energy products rose 14.4 per cent following a 7.1 per cent gain in August. Conventional crude oil increased 16.8 per cent and synthetic crude oil 9.0 per cent. Once crude energy products were removed, the raw-material index fell 0.4 per cent during the month. Metal ores, concentrates and scrap decreased 0.7 per cent; gold ores, concentrates and mill bullion declined 1.5 per cent, while silver ores and mill bullion were down 0.7 per cent. Crop products moved in the other direction, up 2.1 per cent, with canola up 3.7 per cent. Hog prices helped pull animal and animal-product prices down 1.1 per cent.
The difference between monthly and annual comparisons is important. The raw-material index’s 27.0 per cent annual increase reflects an accumulated twelve-month movement, not a one-month change. Crude energy products made the largest contribution to that annual increase; conventional crude oil was 52.2 per cent higher year over year and synthetic crude oil 73.2 per cent higher. On the manufactured-goods side, diesel was 106.1 per cent higher year over year, finished gasoline 45.3 per cent higher, and unwrought aluminum and aluminum alloys 26.9 per cent higher.
Statistics Canada’s methodology distinguishes these producer indexes from the Consumer Price Index. The industrial product measure reflects prices at the factory gate and excludes taxes and downstream costs such as transportation, wholesale and retail margins. The raw-material measure includes costs paid to bring materials to the establishment, including transportation, duties and net taxes. Neither index is a direct measure of consumer inflation or any individual company’s procurement cost. The agency also began moving to a new sample with the September reference month and said the transition will continue through December. These definitions and the sample transition are relevant when comparing the figures with retail prices or interpreting month-to-month changes.
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