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CA: Industrial Product Price Index
| Actual | Previous | Revised | |
| IPPI - M/M | -0.6% | 0.9% | 1.1% |
| IPPI - Y/Y | 4.9% | 6.1% | 6.0% |
| Raw Materials Price Index - M/M | 0.5% | 0.3% | 0.6% |
| Raw Materials Price Index - Y/Y | 6.4% | 6.4% | 7.2% |
Highlights
Canadian producer prices decreased 0.6 percent in December after increasing 1.1 percent in November, for a 12-month increase of 4.9 percent. Excluding energy and petroleum, wholesale prices were up 0.2 percent on the month and 5.8 percent from a year earlier. Energy and petroleum prices fell 7.2 percent on the month and 2.2 percent year-over-year.
Most industrial prices were down on the month, including a 3.0 percent drop in lumber and other wood products, the largest month-to-month decrease since May 2025. By contrast, primary non-ferrous metal products stood out with a 7.1 percent monthly increase, marking their eight consecutive gain. Increases of 25.4 percent in unwrought silver and silver alloys, 15.0 percent in unwrought platinum group metals and their alloys, and 3.4 percent in unwrought gold and gold alloys boosted the category. Primary non-ferrous metal products prices rose 43.0 percent from a year earlier.
"Interest rate cuts by the United States Federal Reserve and global geopolitical uncertainty were among the factors influencing the precious metal price gains in December, as these factors spurred safe-haven demand," Statistics Canada said. It also cited tight global supplies in silver, platinum group metals, and copper markets."Furthermore, planned silver export restrictions announced by China were scheduled to take effect in January 2026, which could have a negative effect on global silver supply in 2026."
The Raw Materials Price Index (RMPI) rose 0.5 percent in December from November and 6.4 percent from a year earlier. Excluding crude energy products, the index was up 2.4 percent and 21.3 percent, respectively. Crude energy prices fell 4.1 percent on the month and 19.3 percent year-over-year.
Definition
The Industrial Product Price Index (IPPI) reflects the prices that producers in Canada receive as the goods leave the plant gate. The IPPI excludes indirect taxes and all the costs that occur between the time a good leaves the plant and the time the final user takes possession of it, including the transportation, wholesale, and retail costs. The report also contains a measure of domestic producers' raw material costs (RMPI) which can be seen as a very loose leading indicator of the IPPI.
Description
The IPPI reflects the prices that Canadian producers receive when goods leave the factory gate, that is, what producers receive for their output. This index is similar to the United Kingdom's producer output index. The index includes prices for major commodities sold by manufacturers, but it excludes indirect taxes and items such as transportation and wholesale and retail costs. The index is affected by the foreign exchange rate of the Canadian dollar versus the U.S. dollar, and each month its impact is noted. The RMPI reflects the prices paid by Canadian manufacturers for key raw materials, either domestically or in world markets. It is published simultaneously with the IPPI and, like that index, has a base year of 1997 and is subject to revisions for six months. This index is analogous to the producer input price index published in the United Kingdom.
The IPPI and RMPI measure prices at the producer level before they are passed along to consumers. Since these indexes measure prices of consumer goods and capital equipment, a portion of the inflation at the producer level gets passed through to the consumer price index (CPI). By tracking price pressures in the pipeline, investors can anticipate inflationary consequences in coming months.
While the CPI is the price index with the most impact in setting interest rates, the PPI provides significant information earlier in the production process. As a starting point, interest rates have an"inflation premium" and components for risk factors. A lender will want the money paid back from a loan to at least have the same purchasing power as when loaned. The interest rate at a minimum equals the inflation rate to maintain purchasing power and this generally is based on the CPI. Changes in inflation lead to changes in interest rates and, in turn, in equity prices.
The PPI is considered a precursor of both consumer price inflation and profits. If the prices paid to manufacturers increase, businesses are faced with either charging higher prices or they taking a cut in profits. The ability to pass along price increases depends on the strength and competitiveness of the marketplace.