Source: The Canadian Press

The Industrial Product Price Index increased 0.3% in May, mainly as a result of the weakening of the Canadian dollar against its U.S. counterpart.

The Raw Materials Price Index declined 7.2%, due primarily to lower crude oil prices.

Statistics Canada reports a 3.4% depreciation of the Canadian dollar had a big influence on the industrial advance in May.

Prices of motor vehicles and other transportation equipment, which are particularly influenced by the exchange rate, were up 2.3%, the largest monthly increase since October 2008 (8.2).

The agency says pulp-and-paper products are also sensitive to exchange rate movements, and their prices rose 2.7% in May, the largest monthly increase since October 2008 (5.3).

The increase in industrial product prices was dampened mainly by lower prices of primary metal products (down 2.9%) and petroleum and coal products (down 2.3).

The industrial index was up 1.4% in May compared with the same month a year earlier.

StatsCan says the sharp drop in the raw materials index was the largest since a 15.3% slide in December 2008 and was mainly due to a 12.7% fall in prices for mineral fuels, particularly crude oil (down 14.2).

A 6.1% drop in prices of non-ferrous metals also contributed to the decline.

From May 2009 to May 2010, raw materials prices rose 6.4%.