Softwood Lumber Sends Canada’s Industrial Product Price Index 3.1% Higher in May

Statistics Canada (StatsCan) is reporting that the Industrial Product Price Index (IPPI) is up by 3.1% month-over-month in May, marking the IPPI’s sixth consecutive monthly increase. Year-over-year, the IPPI was up 16.9% — the largest increase since January 1975 when it was up 17.7%. Softwood lumber (+27.6%) was by far the largest contributor to the gain in the IPPI, as it posted its highest monthly increase on record. Prices for softwood lumber were 235.5% higher than in May 2020. The unprecedented rise in prices has been driven by demand from construction and exacerbated by tight supplies and inventory. Prices for energy and petroleum products rose 4.7%, driven mainly by growth in prices for refined petroleum energy products (including liquid biofuels) (+5.3%). These increases are influenced both by higher prices of crude oil as an input and by higher margins as the refined products exit the refinery.