Industrial prices across Canada are accelerating at the fastest pace in over 40 years amid surging demand for lumber products.
According to Statistics Canada, the Industrial Product Price Index (IPPI) jumped 1.7% in April, and rose 14.2% from year-ago levels, marking the highest increase since February 1980. The majority of the increase stemmed from the lumber and other wood products category, which was up 6.5% for the fifth consecutive month.
Softwood lumber rose 10.2% last month, as prices for the group were 166.3% higher since April 2020. This is the largest year-over-year increase on records dating back to 1956, and marks the second straight month that the series has set a new record. The majority of the skyrocketing increase stems from a strong demand in the residential construction sector, particularly in the US. Similarly, prices for pulp and paper products, which are related to the lumber industry, were up 3.4%, as the cost of wood pulp jumped 7.1% from March.
Aside from the surging lumber prices, consumers are facing even more price pressures across other commodities and goods categories as well. Prices for chemicals and chemical products jumped 1.5% in April, amid higher costs for plastic resins. At the same time, primary ferrous metal products rose for the eighth straight month, with a gain of 2.7% in April, and are now 15.4% higher compared to year-ago levels. Strong demand stemming from China is the key factor behind the upward price increase.
Meat, fish, and dairy product prices increased for the fourth consecutive month, rising by 4.1% amid strong global and domestic demand. Prices for fruit, vegetables, feed, and other food products jumped 1.4% between March and April, and are 12.4% higher from last year’s levels. The rise was largely attributed to higher grain and oilseed product prices, which were up 5.5%.
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.