08/30/2011 09:14 EDT | Updated 10/30/2011 05:12 EDT

Industrial products, raw materials prices drop in July: StatsCan

OTTAWA - The Industrial Product Price Index declined 0.3 per cent and while the Raw Materials Price Index fell 1.2 in July.

Statistics Canada reports chemical products and motor vehicles were the largest contributors to the industrial index decline, while mineral fuels were the major factor in the drop in the raw materials index.

The decreases were the third in three months for both indexes.

The industrial index was up 5.1 per cent in July compared with the same month a year earlier, with 14 of 21 major commodity aggregations advancing and six declining.

The raw materials index was up 19.4 per cent from July 2010.

StatsCan blamed the month-to-month contraction in the industrial index on lower prices for chemicals and chemical products (down 2.6 per cent) and motor vehicles and other transportation equipment (down 1.3).

Pulp-and-paper products (down 1.1 per cent) also contributed to the decline from June.

The industrial decline was moderated by upward movements in primary metal products (1.2 per cent) and petroleum and coal products (0.5).

The agency says the monthly drop in the raw materials index was led by mineral fuels (down 2.2 per cent). Vegetable products and wood (both down 2.5) also declined in July.

StatsCan says grain prices, especially wheat (down 9.7 per cent), were pulled down by the events driving global demand, including the end of a ban on grain exports from Russia and the arrival of much-needed rain for North American and Asian crops.

It reports the July decline was slowed by higher prices for animals and animal products (up 1.3 per cent) and non-ferrous metals (0.9).