MNI DATA ANALYSIS:Energy Takes Toll On Cdn Exprts,Indus Prices>

By Yali N'Diaye 

     OTTAWA (MNI) - Data released Thursday by Statistics Canada showed 

energy took its toll on goods exports in the fourth quarter, while 

further adding downward pressure on industrial prices in January. 

     Canadian industrial product prices declined 0.3% in January, 

marking the third consecutive monthly decrease, Statistics Canada 

reported Thursday, bringing down the 12-month growth rate to 1.0% from 

2.0% the previous month. 

     Meanwhile, raw materials prices increased 3.8% on the month, the 

same as in December. However, the index fell 5.5% from January 2018, 

following a 5.8% decrease in December, due to crude energy products 

(-8.6%). 

     Separately, the agency reported that the current account deficit 

widened to C$15.5 billion in the fourth quarter from C$10.1 billion the 

previous quarter, largely as a result of lower energy prices. 

     - CAD APPRECIATION, ENERGY WEIGH ON PRICES 

     Lower energy and petroleum prices and a 1.0% appreciation of the 

Canadian dollar against the greenback on average in January put downward 

pressure on industrial prices. 

     Excluding a 1.8% monthly drop in energy and petroleum, industrial 

prices edged down 0.1%. 

     The loonie's appreciation had the same impact, as industrial prices 

would have been down 0.1% instead of 0.3% had the Canadian dollar 

remained constant. 

     Overall, prices declined in 12 of 21 major commodity groups on the 

month. 

     Crude energy products also weighed on raw material prices on a 

year-over-year basis. Excluding crude energy, raw material prices were 

down 2.9% year-over-year. 

     However, crude energy product prices rose 8.7% on the month, 

following a 10.4% gain in December. 

     At the retail level, energy also weighed on prices, helping bring 

down the 12-month inflation rate to 1.4% from 2.0%. Gasoline prices fell 

14.2%, the largest 12-month drop since October 2015. In fact, CPI 

excluding gasoline rose 2.1%. Gasoline was the largest downward 

contributor to year-over-year inflation. 

     - ENERGY DAMPENS GOODS EXPORTS 

     Lower energy prices also explained the sharp widening of the goods 

deficit in the fourth quarter, to -C$7.2 billion from -C$0.9 billion. 

Exports of goods fell by C$7.8 billion in the fourth quarter, with 

energy products accounting for most of the value reduction. In 

particular, crude petroleum exports fell C$7.5 billion, with prices down 

nearly 50% in the last two months of the quarter, the agency said. 

     The services deficit narrowed slightly to -C$6.2 billion from 

-C$6.3 billion, current account data showed. 

--MNI Ottawa Bureau; yali.ndiaye@marketnews.com 

[TOPICS: M$C$$$,MACDS$]