MNI DATA NALAYSIS:Weaker CAD Boosts Canadian Industrial Prices>

--IPPI +0.8% M/M; Excluding Petroleum and Coal +0.7% M/M

--IPPI Excluding CAD Depreciation Impact +0.1% M/M

By Yali N'Diaye

     OTTAWA (MNI) - Prices for manufactured goods produced in Canada 

increased 0.8% in March, the largest gain since last November, after 

rising 0.3% in February, boosted by the depreciation of the Canadian 

dollar against its U.S. counterpart, data from Statistics Canada showed 

Monday. 

     On a year-over-year basis, the Industrial Product Price Index 

continued to increase at a steady pace of 2.3%. 

     The higher prices for products sold by Canadian manufacturers in 

March suggest a positive contribution to the value of manufacturing 

sales to be released later this month, notably for energy and petroleum 

sales. 

     --EXCHANGE RATE BOOST 

     The Canadian dollar depreciated by an average 2.7% against the 

greenback over the month, following a 1.3% decrease in February and a 

2.7% gain in January. 

     If not for the impact of the weaker loonie, prices would have edged 

up just 0.1% in March instead of 0.8%. 

     Prices for motorized and recreational vehicles (+0.4%) are 

particularly sensitive to exchange rate movements. 

     --WIDESPREAD GAINS 

     However, increases were widespread across commodity groups, with 16 

of 21 categories recording higher prices. 

     Gains were led by energy and petroleum, with prices up 1.3%, as 

well as pulp and paper, where prices rose +3.4%, the largest increase 

since October 2008. 

     Energy and petroleum prices (+12.4%) were also the main contributor 

to the 12-month IPPI increase. 

     --HIGHER PRICES PAID 

     Prices paid by Canadian manufacturers for key raw materials also 

increased in March, as they appreciated by 2.1% after declining 0.4% in 

February. 

     The Raw Materials Price Index was boosted by crude energy prices, 

which were up 5.3% on the month and 21.1% year-over-year. 

     Excluding crude energy, the RMPI actually decreased 0.5% from 

February, for a 2.0% year-over-year increase. 

     A total of four out of five categories recorded higher prices in 

March, with the index up 10.0% year-over-year. 

     --CONSUMER PRICES UP 

     It remains to be seen to which extent the Canadian dollar 

depreciation will affect prices at the retail level, especially given 

the competition between retailers. 

     Headline CPI picked up to 2.3% in March from 2.2% in February, 

boosted by a 17.1% gain in gasoline prices. Excluding the latter 

category, however, the CPI increased at a steady pace of 1.8%. 

     Core inflation stabilized in March, with the range of the three 

Bank of Canada's preferred measures of inflation remaining at 1.9%-2.1%. 

     Going forward, the BOC expects inflation to pick up to 2.3% in the 

second quarter from 2.1% in the first quarter. 

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

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