Latest inflation numbers highlight cost pressure on manufacturers: CME
June 6, 2011 by Canadian Manufacturers & Exporters
Canadian manufacturers are caught in a vice once again, as they battle changing market pressures and rising inflation, according to the latest industrial data released by Statistics Canada.
Industrial prices were up 0.5 percent in April, while raw material prices rose 6.8 percent from the previous month. Industrial prices increased mostly due to higher costs for refined petroleum products and precious metals. Most manufacturers experienced a decline in industrial prices due to the 1.9 percent appreciation of the dollar in April.
Raw material prices, on the other hand, were up significantly largely due to soaring crude prices.
Compared to April 2010, industrial prices increased five percent, while the cost of raw materials increased by 22.4 percent.
“In other words, manufacturers have had to pay 22.4 percent more for their raw material inputs over the past year, and have been able to pass on only five percent of that increase to their customers,” explained Jean-Michel Laurin, vice-president, global business policy with Canadian Manufacturers & Exporters (CME). “This has resulted in thinner profit margins and slower-than-expected job creation in the manufacturing sector as businesses try to contain costs.”