Manufacturers’ prices rose 1.5% in May, Statistics Canada said today.

The increase in the Industrial Product Price Index (IPPI) was led by higher prices for petroleum and coal products and follows an increase in prices of 1% in April.

On a 12-month basis, StatsCan said prices rose 5.5%, the largest increase since October 1995.

The IPPI reflects the prices that producers in Canada receive as the goods leave the plant gate.

Also fuelling the upward pressure on manufacturers’ prices was prices for motor vehicles and other transport equipment.

Those prices increased 1.8%, mainly as a result of the effect of the exchange rate.

StatsCan said lumber and other wood products increased by 2% “as lower inventories and strong construction activity resulted in higher prices for softwood lumber.”

However, lower nickel, copper and aluminum product prices meant prices for primary metal products declined 1.9%.

Meanwhile, StatCan also reported that manufacturers paid 15% more for their raw materials compared to one year ago, which is the largest 12-month increase since February 2003.

Rising fuel prices were the main culprit as mineral fuels were up 25.6% from a year ago with crude oil prices rising 33.2%.

If mineral fuels had been excluded, the Raw Materials Price Index would have increased 7%.