By Robb M. Stewart
OTTAWA--Producer prices in Canada fell in December and Canadian companies paid less for raw materials thanks in large part to a drop in energy costs, a further sign pricing pressures are easing.
Statistics Canada's industrial product price index slipped 1.1% in December from the month before. On a 12-month basis, the producer-price index was 7.6% higher.
Excluding energy products, producer prices edged up 0.2% on-month in December, the data agency said.
The decline was driven by a second consecutive monthly fall in energy and petroleum products prices, with notable falls in the prices of gasoline and diesel fuel, Statistics Canada said.
Prices for softwood lumber were down for a fifth month running in December, and were 40% lower than a year earlier, the largest year-over-year fall since records began in 1956.
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, declined 3.1% from November. Compared with a year earlier, prices for raw materials were up 7.5% in December.
The fall in raw materials prices was driven in large part by lower prices for crude energy products, though compared with a year earlier prices were almost 20% higher, the agency said. It said prices for metal ores were up month-over-month in December, led by prices for gold, silver and platinum group metal ores and concentrates.
Annual consumer inflation has eased from last summer's peak in recent months, dipping to 6.3% in December from 6.8% the month before, the data agency said Tuesday.
The Bank of Canada, which targets inflation of 2%, aggressively raised interest rates last year but has signaled its tightening cycle may be nearing an end. The central bank is set to decide monetary policy next week, having raised its benchmark rate 4 percentage points over the course of 2022 to bring it to 4.25%, the highest in almost 15 years.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
01-18-23 0906ET
