Factory-gate prices rise 0.6% in July as diesel and gasoline jump

Prices that Canadian manufacturers charge for their goods climbed again in July, pushed up almost entirely by refined fuels. Statistics Canada reported on Thursday that its Industrial Product Price Index (IPPI) rose 0.6% from June and was 12.4% higher than a year earlier, the 22nd consecutive month of year-over-year increases.

At the same time, the cost of the raw materials manufacturers buy moved the other way. The Raw Materials Price Index (RMPI) fell 2.2% on the month, although it was still up 18.1% from July 2025, a slowdown from the 21.0% annual pace recorded in June.

The numbers

The monthly gain in factory-gate prices came from one place. Energy and petroleum products rose 6.4% in July, with refined petroleum energy products up 6.9%, diesel up 10.4% and finished motor gasoline up 4.7%. The agency linked the increase in part to the resumption of the U.S.-Iran conflict in July.

Strip out energy and the picture is softer: the IPPI excluding energy and petroleum products slipped 0.2%. Primary non-ferrous metals fell 5.2%, with unwrought aluminum down 7.0%, its largest monthly decline since April 2025, and unwrought precious metals down 6.9%. Chemicals fell 3.4%, led by a 10.8% drop in fertilizers, pesticides and other chemical products.

• IPPI: +0.6% month over month, +12.4% year over year
• IPPI excluding energy: -0.2% month over month
• RMPI: -2.2% month over month, +18.1% year over year
• Energy and petroleum products: +42.0% year over year

Why it matters

The IPPI tracks prices at the factory gate, before goods reach store shelves, so it is often read as an early signal for consumer prices. Three days earlier, Statistics Canada reported that the consumer price index rose 3.0% year over year in July, up from 2.8% in June, with gasoline up 25.7% from a year earlier.

On the raw materials side, crude energy products fell 3.6% in July, a third straight monthly decline, and metal ores, concentrates and scrap dropped 4.7%. Crop products went the other way, rising 4.8%, the largest monthly gain for the group since March 2022.

The other side of the ledger

Not every reading points to broad-based price pressure. Outside of fuels, manufacturers' selling prices fell in July, and input costs eased for a third month in crude energy. Statistics Canada also notes the indexes are not seasonally adjusted, so month-to-month swings can be noisy.

The trade backdrop adds uncertainty. The IPPI excludes tariffs, while the RMPI includes customs duties on imported raw materials. With Canada-U.S. trade talks still unresolved on the day of the release, future readings could be shaped by policy decisions as much as by commodity markets.

What it means for you

For households, the main takeaway is that fuel remains the swing factor in the cost of living. Producer prices for diesel and gasoline were sharply higher in July, which tends to flow through to transport and delivery costs over time.

For savers and investors, persistent price gains matter because they erode the real return on cash. It can be worth checking whether savings and GIC rates are keeping up with inflation and whether a portfolio is diversified across assets that have historically held up when prices rise. This is general information, not personalized advice.

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