IPPI shows the cost of manufacturing is slowing

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OTTAWA, Ont. — Annual rates of growth for both industrial product prices and the cost of raw materials slowed in May, thanks in large part to the fact energy prices had less impact then during 2000.

Manufacturers’ prices, as measured by the Industrial Product Price Index (IPPI), grew 2.7 per cent from May 2000 to May 2001, compared with a year-over-year gain of 2.9 per cent in April.

Petroleum and coal product prices rose 10 per cent in May. If the impact of petroleum and coal product prices were excluded, the IPPI would have increased 2.2 per cent instead of 2.7 per cent.

Price increases for motor vehicles, chemicals and chemical products, and lumber also contributed to the annual rise.

The IPPI reflects the prices that producers in Canada receive as the goods leave the plant gate. It does not reflect what the consumer pays. Unlike the Consumer Price Index (CPI), the IPPI excludes indirect taxes and all the costs that occur between the time a good leaves the plant and the time the final user takes possession of it, including the transportation, wholesale and retail costs.

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