By Robb M. Stewart
OTTAWA–Producer prices in Canada rose slightly last month, the first increase since last October thanks in large part to a jump in refined petroleum products, while Canadian companies paid more for raw materials.
Statistics Canada’s industrial product price index advanced 1.3% in August from the month before, though on a 12-month basis the index fell 0.5%.
Increased prices for refined petroleum energy products led the month increase, with diesel and gasoline both up in a month when the average price for the crude oil increased on-month.
Excluding energy products, producer prices edged up 0.2% on-month, the data agency said Monday.
Prices were also up for chemical and chemical products, snapping a run of declines for seven consecutive months, as prices for petrochemicals and fertilizers advanced, Statistics Canada said.
The industrial product price index measures the prices that manufacturers in Canada receive once their goods leave the plant. It doesn’t reflect the final prices consumers pay for goods on store shelves.
Prices for raw materials, which track prices paid by manufacturers, increased 3% from July. Compared with a year earlier, prices for raw materials declined 4.3% in August.
Prices paid for crude energy were up strongly for a second month running, mainly due to higher prices for conventional and synthetic crude oil.
Stripping out crude energy prices, the raw materials price index was up 0.2% on the month before.
The Bank of Canada earlier this month held its policy interest rate steady at a 22-year high of 5% after the economy cooled sharply in the second quarter of the year, with output contracting on an annualized basis amid weakening consumption growth and a decline in housing activity. The central bank has forecast annual consumer price index inflation, which picked up to 3.3% in July, will hover around 3% for the next year as economic growth becomes more subdued.
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