Skip to main content

Canadian Producer Prices Index:


Forgetting the monthly data (it’s still accelerating!) the more interesting analysis is the 12 month picture.  Don’t forget that both the Canadian CPI and Core CPI are low, around 1.9% and 0.9%, and trending down.  Looking other side of the transaction we are seeing fast rising producer input prices (creating a profit squeeze for manufacturing and other industries).

The annual IPPI rose 3.4% in February after advancing 3.0% in December and 2.9% in January (in a nutshell its accelerating). The IPPI rise was driven by higher fuel costs (+16.0%), and metals (+15.6%).  Even fruits, vegetables, feeds and other food products all saw rises that substantially outstrip CPI and Core CPI (+5.0%).

Unlike the U.S. which saw a 12% increase in food price over the past 12 months, Canada’s food prices were tempered by the 7.0% YoY appreciation of the CAD against the USD. Currency appreciation reduces IPPI increase by more than 0.5%.  Finally, the Raw Material Producer Index rose by 19.2% YoY, the highest growth since April 2007, when it rose 21.8%.

These statistics may partly explain why Canadian manufacturers are investing so heavily in plant and equipment, we are talking massive double digit growth (a trend that continues from 2010), the implication for productivity are important, we should see Canada’s productivity position Vs. the U.S. improve, as American plant and equipment investments has been in the basement for several years (excess capacity) and the slow “re-hiring” will reduce productivity (initially).

Popular posts from this blog

The end of Tesla?

 it takes a special kind of idiot, to think that he can antagonize his entire customer base, and think that it will not impact his business. When Elon Musk went to work for Donald Trump, and created the doge department, he antagonized every liberal, and these people represent 90% of his client base.That’s not a brilliant move. Now Elon Musk is worth hundreds of billions of dollar, so he shouldn’t care a great deal, however, he needs to care because of several other issues. The cyber truck has been a disaster, most have had to be recalled because of defective glue, it’s not a truck, it’s not a car, it’s noisy, relatively uncomfortable, but great as a development platform. What Tesla has learned in making car manufacturing more seamless is truly amazing. The problem was that Elon Musk was so pissed with the Democrats, and with Joe Biden, in particular because of some slight, which were just plain stupid too. By the way, that he decided to support with hundreds of millions of dollar, ...
Post a Comment
Read more

Donald Trump‘s bad bargain

 The entire of 2023 and 2024 when Donald Trump was running for the White House, his mantra was no war, that the Ukraine conflict would be resolved in a day, and that he would do everything not to involve America and war. How the world has changed! He finds himself facing three conflicts; Ukraine, still going on almost 5 months after he became president. Gaza, an unspeakable crime against humanity, is obviously going to go all the way to its bitter end. And finally, Israel’s attack against Iran. It’s important to note, that Benjamin Netanyahu first indicated at the United nation that the Iranian were 3 to 5 years away from having the nuclear bomb. He made that statement in 1995. Therefore, no one is surprised that he uses the same two lines every so often. It’s entirely possible, that 30 years after he first announced it, that Iran has finally developed the bomb. It’s also remarkable that Iran, local power has been destroyed, from Yemen, to Syria, via Lebanon and Gaza to small exten...
Post a Comment
Read more

TACO again, but worst!

 Donald Trump got the rare earth metals that he had thrown away on April 2, liberation day as he called it. What did the Chinese get in exchange? The whole deal, is on the wrap right now. But let’s be clear. It’s the Chinese that have the upper hand.Some of the materials made by the Chinese, are simply unavailable anywhere else. suspicions are that the Chinese got the high-end chips that they lost under Biden. Tariffs will probably return to the level of April 1, and in the end Donald and his friends got nothing for it. It gets worse, Chinese exports to United States are down 40%. The Chinese have found new markets, I probably never gonna buy American grain again. Once again, Donald Trump proved he’s a great negotiator. He got absolutely nothing for his Showmanship. He told the world, that everyone would come and kiss his ass, instead they’re laughing At him. There’s no joke about Donald Trump, a 25 and inherited a huge fortune and proceeded to make it a small one. Bottom line, the...
Post a Comment
Read more