The prices for raw materials dropped by 15.6% in March, according to Statistics Canada, as crude oil prices fell by a record 39.7% in the month.
The huge fall in crude prices followed the drop in global demand due to Covid-19 and the failure of OPEC and Russia to agree on supply cuts, which left daily supply outstripping demand.
The decline in raw materials prices was the largest monthly decrease since the global financial crisis in late 2008.
Excluding crude energy products, StatsCan’s raw materials price index rose 0.4% in March as precious metals prices gained 7.3%.
“The market for gold in March was volatile,” StatsCan said. “In the first half of the month, prices fell sharply, corresponding to declines in equity markets worldwide.”
Yet, in the second half of the month, prices surged as investors sought safe haven assets, the agency noted.
“Global liquidity of gold was also impacted by Covid-19 as refineries were shut down and supply routes were disrupted,” StatsCan said.
While raw materials prices were down sharply in March, the prices for products manufactured in Canada also dropped by 0.9%, StatsCan reported.
Again, weaker energy prices led the way. For example, gas prices dropped 20.7% in March.
Excluding refined energy products, industrial prices were up 1.0% during the month, as pulp and paper prices rose 3.2% and vehicle prices increased 2.0%.
StatsCan noted that the Canadian dollar depreciated 5.0% relative to the U.S. dollar during the month, pushing up the Canadian-dollar prices for products that are typically denominated in U.S. dollars.
Absent the decline in the loonie, industrial prices would have dropped by 2.1% in March, StatsCan said.
Separately, StatsCan also reported that average weekly earnings rose 3.7% in February. Average hours worked remained stable, but payroll employment declined by 35,000 from the previous month.
These data largely predate the effects of the Covid-19 outbreak, but will serve as the benchmark for measuring the impact of the crisis in future releases.
“Although the landscape of the Canadian labour market has shifted since February, data from the early stages of the Covid-19 pandemic are important for monitoring when and where changes will occur over the following months,” the agency said. “As a result, this release largely serves as a benchmark for measuring the effects of Covid-19 on payroll employment, earnings and hours worked in Canada.”