Falling Lumber and Wood Product Prices Cause Canadian Industrial Product Price Index to Decline in July
Industrial product and raw materials price indexes, July 2021
Statistics Canada (StatsCan) reported today (8-27-21) the Canada’s Industrial Product Price Index (IPPI) declined -0.4% in month-over-month in July but year-over-year was up 15.4%. The Raw Materials Price Index increased for the tenth consecutive month, up 2.2% on a monthly basis in July and was 37.7% higher year-over-year.
Among the 21 major commodity groups that make up the IPPI, in July 17 were up, 3 were down and 1 was unchanged. The biggest drag on the July IPPI was the decline in lumber and other wood products (-23.0%), primarily driven by a 37.7% drop in prices for softwood lumber, the biggest monthly decline on record for this product group. Despite uncertainty due to extreme heat and forest fires in timber-producing regions, prices fell for the second month in a row. This decrease was partially attributable to lower demand: housing starts in the US, the primary purchaser of Canadian softwood, were down -7.0% on a monthly basis in July.
Excluding lumber and other wood products from calculation, the IPPI would have risen 1.5% in July.
FEA compiles the Wood Markets News from various 3rd party sources to provide readers with the latest news impacting forest product markets. Opinions or views expressed in these articles do not necessarily represent those of FEA.