Canada’s Industrial Product Price Index and Raw Materials Price Index Rise in October

Statistics Canada (StatCan) reported today (11-18-22) the prices of products manufactured in Canada, as measured by the Industrial Product Price Index (IPPI), rose 2.4% on a monthly basis in October and were 10.1% higher year-on-year. Excluding energy and petroleum products, the IPPI rose 0.9% month-over-month and 6.1% year-over-year.

Prices for softwood lumber fell 1.8% in October, a third consecutive month-over-month decline. Year-over- year, prices were 4.5% lower compared with October 2021. This price trend for lumber is linked closely with falling demand for housing as interest rates rise. In October, the US average 30-year fixed mortgage rate was approaching 7.0%, the highest in 20 years. In September, US housing starts fell 8.1%, while single-family housing starts dropped to the lowest level since May 2020.

Prices of raw materials purchased by manufacturers operating in Canada, as measured by the Raw Materials Price Index (RMPI), increased 1.3% on a monthly basis in October, and posted a 9.0% year-over-year increase. The higher price of crude energy products, up 2.0%, contributed to the monthly gain in the RMPI. The price of conventional crude oil rose 5.1% in October and was 18.5% higher year-over-year.