Lower Canadian Softwood Lumber Prices Leads to Decline in Canada’s Industrial Product Price Index for June

Statistics Canada (StatsCan) today (7-14-21) released its flash/early estimate of the Industrial Product Price Index (IPPI) for June 2021. A final release will be issued on July 30, 2021. According to the report, the IPPI decreased by -0.4% month over month in June. However, year-over-year, the index was up 16.2%. The largest contributor to the monthly decline in the IPPI was lumber and other wood products that were -6.9% below May. The decrease in the group was mostly due to lower prices for softwood lumber, which fell -12.8%, following record monthly growth in May of 25.0%. This is the first-time softwood lumber has fallen since November 2020 (-15.0%). Despite the monthly decrease, prices for softwood lumber were 172.6% higher than in June 2020. To a lesser extent, prices for chemicals and chemical products (-1.4%) also contributed to the dip in the IPPI. Prices for fruit, vegetables, feed and other food products were down 1.4% in June. This is the first monthly decline for the group since August 2020 (-0.4%). The drop is mostly attributable to lower prices for grain and oilseed products, n.e.c. (-8.5%).