Prices of goods produced in Canada, as well as prices for the raw materials needed to produce them, have risen significantly over the past year, particularly for lumber-related products.
According to Statistics Canada, the final print of the Industrial Product Price Index (IPPI), which measures the cost of goods produced in Canada, rose 1.6% in April, and 14.3% from year-ago levels— the highest since February 1980. Similarly, prices of raw materials purchased by Canadian producers, which are measured by the Raw Materials Price Index (RMPI), increased 1% last month, and jumped by a whooping 56.4% from April 2020.
The IPPI marked its fifth consecutive monthly increase in April, with 18 of the 21 major commodity groups posting increases. Excluding energy and petroleum products, the IPPI rose 1.8%. The jump in prices was largely the result of surging costs of lumber and wood products, particularly the price of softwood lumber, which has skyrocketed 169.4%— the sharpest year-over-year increase in history.
Likewise, prices for pulp and paper products jumped 3.6%, while prices for chemicals and chemical products rose 1.5% in April. Prices for meat, fish and dairy products, which increased 4.1% last month, also added to the IPPI gain.
In the meantime, the Raw Materials Price Index (RMPI) rose 1% in April, marking the seventh straight month of gains, and rose 56.4% from year-ago levels— the highest on records dating back to 1981. Five of the six categories posted increases, and excluding crude energy products, the RMPI rose 3.4%, amid higher prices for animals and animal products, as well as crop products.
Information for this briefing was found via Statistics Canada. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.