Canada producer prices sink 0.7 percent

Aug 30, 2007 - The appreciation of the Canadian dollar and falling metals prices knocked down industrial product prices by a bigger-than-expected 0.7 percent in July from June, according to Statistics Canada data on Thursday.

Analysts in a Reuters poll had forecast, on average, a 0.5 percent decline in the price of goods at the factory gate. Prices had fallen 1.2 percent in June, Statscan said after revising that figure from 1.3 percent previously.

A jump in crude oil prices, however, pushed raw materials prices up by 3.9 percent in the same period, outshining forecasts for a modest 0.5 percent gain.

A downturn in prices for primary metals products such as nickel and the rise in the currency, which lowers prices for motor vehicles, were the main factors pushing the producer price index lower.

Year-over-year, producer prices fell 0.3 percent and raw materials prices jumped 3.5 percent.