Canadian Industrial Product Price Index Edges Higher, but Raw Materials Price Index Inches Lower in January

Statistics Canada (StatCan) reported Friday (2-17-23) that following two consecutive months of declines, the Industrial Product Price Index (IPPI) increased 0.4% month-over-month and 5.4% year-over-year in January. However, the Raw Materials Price Index (RMPI) suffered its third consecutive monthly decline, moving 0.1% lower month-over-month and only increasing 1.2% year-over-year.

In January, the price of softwood lumber fell 9.1%, marking its sixth consecutive monthly decline. On a yearly basis, the price of softwood lumber fell 53.0%, the largest year-over-year drop for the series on record. StatCan noted that the downward trend in softwood lumber occurred amidst a slowing housing market and the ongoing higher cost of borrowing money. StatCan pointed to the US Federal Reserve Board’s announcement of a 25 basis-point rate hike in February, putting further downward pressure on US housing demand—the primary market for Canadian softwood lumber.