Canadian Industrial Product and Raw Materials Price Indices for July

On Wednesday, Statistics Canada (StatCan) released the Industrial Product Price Index (IPPI) for July. On a monthly basis, the IPPI was unchanged in July, following a 0.1% decrease in June. Higher prices for energy and petroleum products, up 2.0%, were offset by lower prices for lumber and other wood products, down 3.4%. Excluding energy and petroleum products, the index declined 0.2%.

Prices for lumber and other wood products fell 3.4%, mainly on lower prices for softwood lumber, down 7.8%. This was the fourth consecutive monthly decrease for softwood lumber and the largest decline since September 2022, when it declined 9.6%. StatCan says the decline was mainly attributable to lower demand caused by a slowing housing market in both Canada and the US. Seasonally adjusted, housing starts in Canada declined 1.5% from Q1 to Q2, according to Canada Mortgage and Housing Corporation data. Quarterly housing starts in the US dropped 4.8% in Q2, reaching the lowest level since 2020Q2.

The IPPI rose 2.9% year-over-year in July, despite an 11.2% decline in softwood lumber.

Meanwhile, the Raw Materials Price Index (RMPI) increased 0.7% month-over-month in July, mainly due to higher prices for crude energy products, up 2.2%. Excluding crude energy products, the RMPI was down 0.2%.

On a yearly basis, the RMPI was 4.1% higher in July—the fifth straight year-over-year increase.