Canada Producer Prices Rise 0.7% in February From January

By Robb M. Stewart

OTTAWA--Producer prices in Canada rose last month to snap a steady run lower, driven by higher prices for energy and petroleum products, and Canadian companies paid more for raw materials.

Statistics Canada's industrial product price index increased 0.7% in February from the month before, after declining for four straight months. On a 12-month basis, the producer-price index was down 1.7%.

Prices for energy and petroleum products climbed 5.2% for the month, thanks mainly to higher prices for refined petroleum products, including gasoline and diesel fuel. Unexpected shutdowns and seasonal maintenance reduced the output of several prominent North American refineries in February, and stocks of gasoline and distillate fuel oil declined throughout the month, Statistics Canada said.

Excluding energy products, producer prices edged up 0.1% on-month, the data agency said Monday.

Prices for chemicals and chemical products were also up, largely on higher prices for petrochemicals and plastic resins, while prices fell for goods including for meat, fish and dairy products, intermediate food products such as canola or rapeseed oil, and for primary non-ferrous metal products.

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, climbed 2.1% from January. Compared with a year earlier, prices for raw materials were 4.7% lower.

Companies paid more for crude energy products in February, while costs for crop products saw a seventh consecutive monthly drop and prices for metal ores, concentrates and scrap edged down.

Economic activity in Canada stalled in the middle of last year, and despite a recovery in the final months of 2023 is expected by the central bank to remain muted for next few quarters as households and businesses adapt to higher interest rates following an aggressive campaign that saw the benchmark policy rate lifted to a 22-year high.

Write to Robb M. Stewart at [e-mail]

(END) Dow Jones Newswires

03-18-24 0901ET