The prices for industrial products and raw materials declined in February as the early effects of the Covid-19 pandemic and falling global oil prices started to emerge, according to new data from Statistics Canada.
The national statistical agency reported that prices for manufacturers’ raw materials dropped by 4.7% in February, primarily due to falling crude energy prices, which dropped by 9.8% in the month.
“Concerns about the impact of Covid-19 on global demand, ample global supply of petroleum, and uncertainty about the extension of OPEC and Russia’s oil cut agreement all contributed to this decrease,” StatsCan said.
Excluding energy products, the Raw Materials Price Index (RMPI) was down by 1.0% in February. Here, too, the early effects of the pandemic were evident, as the price of copper declined by 4.2% in the month.
“As copper is commonly used in construction, electronics, and transportation equipment, the decline is partly attributable to concerns of Covid-19’s effect on the global economy,” StatsCan noted.
Year over year, the RMPI was down 5.9%, StatsCan reported.
Again, the decline was largely due to a drop in crude energy prices, which were down by 12.7% over the period.
The Industrial Product Price Index (IPPI), which tracks prices for products manufactured in Canada, declined by 0.5% in February.
“This decline was primarily due to lower prices for energy and petroleum products,” StatsCan said.
Jet fuel prices dropped 11.2% in the month, and prices for other types of refined petroleum products also fell.
“These declines can be linked to lower prices for crude oil, as well as concerns about the impact of Covid-19 on demand,” StatsCan said.
Along with those effects, StatsCan also noted that above-average seasonal temperatures in North America reduced the demand for heating fuel.
Year-over-year, the IPPI was down 0.3%, primarily due to a 3.0% decrease in prices for energy and petroleum products, StatsCan reported.