Canadian Industrial Product Price Index Declines in August — Led by Lower Lumber and Wood Product Prices

Statistics Canada (StatsCan) reported today (9-29-21) that prices for products manufactured in Canada, as measured by the Industrial Product Price Index (IPPI) declined -0.3% month-over-month in August. However, year-over-year (August 2020 to August 2021) they were up 14.3%. Prices of raw materials purchased by manufacturers operating in Canada, as measured by the Raw Materials Price Index (RMPI), decreased -2.4% month over month in August but were 27.7% higher when compared with the same month in 2020.

Of the 21 major commodity groups that comprise the IPPI, 16 were up and 5 were down. Lower prices for lumber and other wood products (-14.2%) were major contributors to the decline in the IPPI. In this commodity group, the price of softwood lumber dropped -22.3%, following a record decline of -38.1% in the previous month. Compared with August 2020, softwood lumber prices fell -14.2%, the first year-over-year decline since September 2019. The abundant wood supply coupled with a slowdown in demand for construction and renovation materials is partly responsible for this decline.