Oil Field by Mayhem Chaos
Industrial products and the raw materials used to manufacture these products grew more than expected in March. The main reason for the growth was high petroleum prices, according to Statistics Canada.
As the production in oil-producing countries was reduced in March, prices for petroleum and coal products increased sharply. The Industrial Product Price Index (IPPI) increased 0.9% in March, driven by an 8.2% increase in petroleum and coal products. Excluding these products, the IPPI would have decreased 0.1%.
Some Canadian exporters who trade with the US are paid on the basis of US dollar prices. That’s why the strength of the Canadian dollar in relation to the US dollar reduces the corresponding prices in Canadian dollars. “Without the impact of the exchange rate, the IPPI would have risen 1.1% instead of 0.9%,” says the report.
CTV news adds that a 5.8% slump in prices for copper, copper alloy, and nickel products following eight months of increases dragged down primary metals prices by 0.3%, further moderating the climb in producer prices.
The Raw Materials Price Index (RMPI) grew by 5.7% as a result of the higher prices for crude oil (+16.2%). The month-to-month growth was 16.7% in March, following gains of 9.6% in January and 11.3% in February. Excluding mineral fuels, the RMPI index would have fallen 1.9%.
Economists had expected the IPPI to increase 0.7% and the RMPI to 2.5% in March.