Prices of products manufactured in Canada, as measured by the Industrial Product Price Index (IPPI), increased 2.4% month over month in March and gained 7.8% year over year, said the country's statistical agency on Thursday.
Meanwhile, prices of raw materials purchased by manufacturers operating in Canada, as measured by the Raw Materials Price Index (RMPI), increased by 12.0% month over month and rose 23.6% year over year, noted Statistics Canada in a statement.
The closure of the Strait of Hormuz, an important global shipping lane for oil and other products, was the main event impacting price movements across multiple commodities in March, including energy and oil products and chemicals and chemical products, pointed out StatsCan. A significant increase in prices was recorded in the energy and oil products category, driving the monthly gain in the IPPI, while the prices of chemicals and chemical products notably increased as well, to a lesser extent.
Excluding energy and oil products, the IPPI decreased 0.5% month over month in March.
Excluding crude energy products, the RMPI increased 0.2% month over month.
Data collected from this survey are used to produce two key measures of price change for the Canadian economy: the IPPI and the RMPI. The IPPI measures price movements for products sold by manufacturers in Canada, and the RMPI measures price movements for raw materials purchased by manufacturers in Canada.
The products reported on this survey will be followed over time, and each month, the price movements for these products are aggregated to produce the IPPI and the RMPI. Data for about 6,000 products are used to produce the IPPI and RMPI.
The IPPI and RMPI are used extensively by businesses for contract escalation and industry analysis. StatsCan uses these indexes to deflate current dollar values and derive estimates of real growth and productivity for the manufacturing sector.