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CA: Industrial Product Price Index
| Actual | Previous | Revised | |
| IPPI - M/M | 2.4% | 0.4% | 0.6% |
| IPPI - Y/Y | 7.8% | 5.4% | 5.6% |
| Raw Materials Price Index - M/M | 12.0% | 0.6% | 0.9% |
| Raw Materials Price Index - Y/Y | 23.6% | 8.6% | 9.1% |
Highlights
Canadian producer price gains picked up in March to 2.4 percent from 0.4 percent in February on a monthly basis, and to 7.8 percent from 5.6 percent year-over-year. The closure of the Strait of Hormuz was the key driver of commodity price movements, including energy and petroleum products and chemicals and chemical products.
The IPPI excluding energy and petroleum was down 0.5 percent on the month and up 5.3 percent year-over-year.
Energy and petroleum product prices soared a record 27.4 percent from February, driven by a 29.3 percent surge in refined petroleum energy products as crude energy prices, the primary input for refined petroleum, soared 41.1 percent from February. Diesel fuel was up 33.2 percent and finished motor gasoline up 28.8 percent.
Also driving up the industrial product price index was a 4.1 percent increase in chemicals and chemical product prices, the largest monthly gain since February 2021.
By contrast, primary non-ferrous metal product prices declined for the second consecutive month, by 1.7 percent from February after nine months of increases from May 2025 to January 2026.
On a year-over-year basis, the main driver of the IPPI gain in March was an 86.0 percent increase in unwrought gold, silver, and platinum group metals, and their alloys. Despite a monthly decline in monthly prices of precious metals, investment demand was still up from a year earlier.
Energy and petroleum product prices were up 28.7 percent year-over-year.
On the downside, softwood lumber prices fell 10.8 percent.
The Raw Materials Price Index (RMPI) was up 12.0 percent on the month, with five of six categories recording gains, led by crude energy. Metal ores, concentrates and scrap was down 0.9 percent.
On the 12-month basis, the RMPI increased 23.6 percent, driven by a 26.8 percent advance in crude energy.
Excluding crude energy, the RMPI increased 0.2 percent on the month and 21.8 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.