In a recent report, it was revealed that producer prices in Canada have slipped, primarily due to a decrease in energy costs and lower prices for raw materials. According to Statistics Canada, the industrial product price index fell by 0.4% in November compared to the previous month. Additionally, on a year-over-year basis, the producer price index saw a decline of 2.3%.
Excluding energy products, producer prices experienced a slight decrease of 0.1% from the previous month, as stated by the data agency on Tuesday.
The decrease in prices can be attributed to consecutive monthly declines in energy and petroleum products. Gasoline costs, in particular, played a significant role in these lower prices. Chemicals and chemical products also experienced a decline, along with meat, fish, and dairy products.
It’s important to note that the industrial product price index only measures the prices received by Canadian manufacturers once their goods have left the production facility. It does not reflect the final prices that consumers pay for these goods.
In addition to the decline in producer prices, prices for raw materials also saw a significant drop. Manufacturers paid 4.2% less for raw materials in November compared to October. Furthermore, on a year-over-year basis, prices for raw materials fell by 4.6%.
Crude energy products experienced the most substantial monthly decline since April 2020, mainly due to a sharp pullback in crude prices. On the other hand, prices for gold, silver, and platinum group metals increased, while prices for live animals decreased.
The Canadian economy has experienced a significant slowdown this year, and the central bank predicts that it will continue to be weak in the coming year. The economy is adjusting to higher interest rates following an aggressive campaign that raised the benchmark policy interest rate to a 22-year high.
