Canadian producer prices rose by 0.7 per cent in December from November thanks to higher energy prices as well as the effect of the weaker Canadian dollar, Statistics Canada said on Monday.
The increase was greater than the 0.3 per cent advance forecast by market analysts and represented the biggest jump since the 1.5 per cent recorded in February 2013. Statscan revised November’s month-on-month growth to 0.2 per cent from an initial 0.1 per cent.
Energy and petroleum prices climbed by 2.0 per cent, pushed up by a 5.0 per cent leap in the price of diesel fuel. Year-over-year producer prices rose by 1.4 per cent compared to the 0.6 per cent advance seen in December 2012.
Statscan said producer prices had also been boosted by the weaker Canadian dollar, which has slipped steadily since October 2013 and is now trading at more than four year lows. Some Canadian producers price their exports in U.S. dollars.
The dollar dropped by 1.4 per cent against the greenback in December and without the measurable effect of the exchange rate, producer prices would have risen by 0.4 per cent from November rather than 0.7 per cent, Statscan said.
Raw materials prices jumped by 1.9 per cent from November on a 3.3 per cent increase in prices of crude energy products. Prices increased by 2.1 per cent over the previous 12 months compared to the 6.3 per cent year-on-year drop recorded in December 2012.