By Robb M. Stewart


OTTAWA--Prices for Canadian manufactured products fell last month, and Canadian companies paid less for raw materials, thanks largely to a drop in crude oil costs.

Statistics Canada's industrial product price index fell 1.0% in October from the month before after edging up 0.4% in September. On a 12-month basis, the producer-price index was down 2.7%.

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.

The weakness for the month was driven by a drop in prices for energy and petroleum products, which were down 5.7% from the month before. Statistics Canada said prices were broadly lower for refined petroleum products, particularly finished motor gasoline.

Prices for softwood lumber also were down sharply, notching the biggest monthly decline since March with a drop of 6.4%, in part due to ongoing weak seasonal demand as well as high interest rates that continue to damp real estate activity.

Excluding energy products, producer prices were 0.3% lower on-month, the data agency said Friday.

Prices for raw materials, which tracks prices paid by manufacturers, fell 2.5% from August. Compared with a year earlier, prices for raw materials were down 0.8% in October.

The data agency notes that crude oil prices were highly volatile in October, with ongoing geopolitical instability in the Middle East but also falling demand and concerns about future demand. Stripping out crude energy product prices, the raw materials index was 1.0% lower than in September.

Prices for metal ores, concentrates and scrap were down for the month, mainly on lower prices for nickel ores and concentrates. Meanwhile, prices for hogs declined for a second consecutive month.

Economic activity in Canada has cooled sharply this year in the wake of more than a year of aggressive interest-rate increases by the Bank of Canada that took its policy rate to a 22-year high. The central bank expects the economy to remain weak for the next year and last month left its benchmark rate unchanged as economy looks to shift from a state of excess demand where producers can't keep up with consumption, to a state of spare capacity where supply exceeds demand.


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


(END) Dow Jones Newswires

11-17-23 0903ET