Softwood lumber producer prices in Canada jumped 12.2% in November, their largest monthly increase since January 2022, driven by limited supply and increased demand. The Industrial Product Price Index (IPPI), which tracks changes in producer prices for manufactured goods, rose 0.6% in November and 2.2% year over year, according to Statistics Canada.
Producer prices for lumber and wood products overall increased 5.7%, with softwood lumber leading the rise. This marks the fourth consecutive monthly increase in softwood lumber prices, as demand in early November coincided with supply constraints in the industry. The IPPI’s 0.6% monthly increase followed a 1.2% rise in October. Exchange rate movements also played a role, as the Canadian dollar depreciated 1.6% against the US dollar, influencing the prices of goods priced in USD.
Energy and petroleum product prices increased 1.1%, supported by a 1.7% rise in refined petroleum energy products. Diesel fuel prices climbed 3.3%, while light fuel oils rose 6.9%, driven by increased seasonal demand for heating fuels. Offsetting gains, producer prices for primary non-ferrous metals dropped 1.0%, led by declines in unwrought gold, silver, and platinum group metals due to a stronger US dollar and rising bond yields.
Year-over-year, the IPPI grew 2.2% in November. Softwood lumber prices were up 21.9%, while precious metals, including unwrought gold, silver, and platinum group metals, surged 32.5%, driven by economic and geopolitical uncertainties. However, declines in diesel fuel (-16.3%) and grain and oilseed products (-21.7%) partially offset these increases.
The Raw Materials Price Index (RMPI), which tracks prices for raw materials purchased by manufacturers, fell 0.5% in November following a 4.0% rise in October. Crude energy product prices declined 2.2%, primarily due to lower prices for conventional crude oil (-2.7%) and synthetic crude oil (-1.8%). Excluding crude energy products, the RMPI rose 0.6%. Year-over-year, the RMPI increased 2.0%, with significant contributions from gold, silver, and platinum group metal ores (+36.9%) and cattle and calves (+10.8%). In contrast, prices for logs and bolts fell 10.9%, contributing to overall price declines for some raw materials.
