Manufacturers pinched as materials costs outrun product prices

Prices of manufactured goods and raw materials rose less in July than in the previous four months but were still far higher, after a record-breaking oil price spike, than they were a year ago, Statistics Canada reported Friday.

The news is grim for Canadian manufacturers because prices they pay for materials are rising much faster than prices they get for goods leaving their plants.

The manufactured goods price index was up 0.4 per cent from June and 6.8 per cent from July 2007. The raw materials price index was up 1.4 per cent from June and 28.9 per cent from July 2007.

Oil hit record price of $147.27 US in July

The various increases were due mainly or entirely to rising costs of oil, coal, natural gas and products made from them.

Excluding those things, the manufactured goods index was up only 0.1 per cent in the latest month and 1.6 per cent in a year, and the raw materials index was up only 0.2 per cent in the month and was down five per cent in a year.

The price of crude oil set a record of $147.27 US July 11 before settling to levels now near $118.

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