By Robb M. Stewart


OTTAWA--Prices for Canadian-manufactured products fell for a third consecutive month in December last month, while Canadian manufacturers paid less for raw materials as crude oil prices dropped.

Statistics Canada's industrial product price index declined 1.5% from the month before, and on a 12-month was 2.7% lower.

Excluding energy and petroleum products, producer prices slipped 0.6% from November, the data agency said Wednesday.

For the year, the price index was down 1.8% following sharp gains the two previous years. It marked the second-sharpest fall in the history of the index since 1956, with lower prices for energy and petroleum products driving the annual fall. Still, compared with 2019 before the Covid-19 pandemic, prices were 25.6% higher in 2023.

For December, prices for energy and petroleum fell 8.5% on-month, the largest drop since the final month of 2022, thanks largely to lower prices for diesel fuel and finished motor gasoline amid concerns about future oil demand and elevated global petroleum supply, the agency said.

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, dropped 4.9% from November. Compared with a year earlier, prices for raw materials were 7.9% last month.

Crude products led the monthly decline, falling 10.3% after a drop of 13% in November. Crop products prices fell for a fifth month in a row, sliding 3.3% due mainly to lower canola prices.

Economic activity in Canada has cooled sharply this year and the central bank expects the economy will remain weak for next few quarters as it adapts to higher interest rates following an aggressive campaign that saw the benchmark policy rate lifted to a 22-year high. The Bank of Canada meets next week to decide on interest rates and update its economic projections.


Write to Robb M. Stewart at robb.stewart@wsj.com


(END) Dow Jones Newswires

01-17-24 0919ET