Machinery and Equipment Price Index (MEPI)

Detailed information for fourth quarter 2016

Status:

Active

Frequency:

Quarterly

Record number:

2312

The Machinery and Equipment Price Index (MEPI), provides quarterly estimates of price changes for machinery and equipment purchased by industries in Canada.

Data release - February 23, 2017

Description

The Machinery and Equipment Price Index (MEPI), provides quarterly estimates of price changes for machinery and equipment purchased by industries in Canada. The MEPI is used by the Canadian System of National Accounts (CSNA) to calculate constant price estimates of final demand purchases of capitalized machinery and equipment, through the deflation process.

As an economic indicator, the MEPI provides information on the changing costs of capital investment by industries in Canada. This information is organized from both the industry and commodity perspectives. In addition, the MEPI tracks these price movements on a domestic and on an imported basis.

Data are available at the Canada level only.

Reference period: The time period for which the MEPI equals 100; currently this is the year 2010.

Collection period: The collection process occurs on a monthly basis.

Subjects

  • Machinery and equipment price indexes
  • Prices and price indexes

Data sources and methodology

Target population

The target population for the MEPI consists of all industries in Canada that purchase machinery and equipment.

The commodity universe for the MEPI consists of all machinery and equipment purchased by industries in Canada and corresponding to the classification by commodity incorporated in the Input-Output (IO) tables, that is the Input-Output Commodity Classification (IOCC).

The industry universe for the MEPI consists of all industries in Canada that purchase machinery and equipment and corresponding to the classification for final demand categories incorporated in the IO tables, that is the Input-Output Final Demand Classification (IOFDC).

The classifications of the IO tables can be found at the following link http://www.statcan.gc.ca/nea-cen/hr2012-rh2012/data-donnees/aggregation-agregation/aggregation-agregation-eng.htm

Finally, the price universe for the MEPI is, ideally, the purchaser price. However, based on the data sources used for the index calculations, the MEPI is based on a producer price. This is the price collected for goods sold at the factory gate and excluding taxes, tariffs, transportation costs, etc.

Instrument design

This methodology does not apply.

Sampling

This is a sample survey with a longitudinal design. The frame is based on a list of commodities and industries from the IOCC and IOFDC for the machinery and equipment categories.

Data sources

Data are collected from other Statistics Canada surveys and/or other sources.

Data are collected from other Statistics Canada surveys (the Industrial Product Price Index and the Computer and Peripherals Price Indexes) and other sources (the U.S. Bureau of Labor Statistics).

Error detection

Error detection is conducted at the time of data collection and also during post collection processing, using a set of systematized error detection procedures to identify outliers and possible reporting anomalies. Records that fail these edits are reviewed for editing and correction when necessary or edit failure may trigger a follow-up with the respondent.

Time and effort is devoted to keeping the specifications constant such that only the pure changes in price are tracked. Some information are also collected in order to ensure, as much as possible, that the collected data correspond to the same specifications over time. This constant quality price then feeds into the Canadian System of Macroeconomic Accounts'(CSMA) estimates of constant dollar GDP.

Imputation

Missing data are generally estimated by a systematized imputation process. In any given period, price data may not be available for estimation. In such cases, missing data are imputed using the average price movement of remaining units within the same stratum (overall mean or targeted mean imputation method).

Estimation

Prices
The MEPI is based on a producer price. This is the price collected for goods sold at the factory gate and excluding taxes, tariffs, transportation costs, etc.

Weights
For the MEPI, commodity and industry weights are derived from the shares of capital investment by industries in Canada for year 2010, valued at 2010 purchaser prices. The weights are derived from the final demand matrix of the IO tables compiled by the CSNA (Input-Output Structure of the Canadian Economy in Current Prices, record number 1401).

Indexes
Two sets of price indexes for the MEPI are produced. The first set of indexes is produced by commodity and classified according to the 2009 IOCC. The second set of indexes is produced by industry and classified according to the 2009 IOFDC. Within each category, price indexes are produced by total, domestic and import.

Quality evaluation

An in-depth assessment of quality is conducted prior to the dissemination of estimates. This assessment is based on two key elements of quality (accuracy and coherence); as defined in Statistics Canada's guidelines for the validation of statistical outputs.

The survey's data collection strategy is designed to ensure that targeted response rates are met every cycle. Analysts pay close attention to this metric and react appropriately to ensure that the survey's coverage of the industry is thorough. Particular attention is also given to ensuring that sampled products or services are representative of actual transactions happening in the market place. These two activities, fundamental to the overall quality of the estimates, are done consistently.

Analysts also undertake additional validation activities every cycle to ensure the coherence of survey estimates. These include among others activities: analysis of price changes over time (including analysis of trends), at the business/company, industry, subsector and sector levels; certification of key contributors to price change; and confrontation of estimates against other related data sources. Contextual analysis of survey results is also performed in light of prevailing economic conditions.

Engagements with relevant stakeholders are also undertaken periodically. Forums involving other Statistics Canada analysts, industry stakeholders and partners at other national and international statistical agencies provide valuable insights that inform the development and research agenda of the program.

Disclosure control

Statistics Canada is prohibited by law from releasing any information it collects which could identify any person, business, or organization, unless consent has been given by the respondent or as permitted by the Statistics Act. Various transformations are applied to collected price data in the calculation of price indexes, such that it is not possible to identify the raw price data obtained from any survey participant. Confidentiality rules are also applied to price indexes that are released or published to prevent the publication or disclosure of any information deemed confidential. If necessary, data are suppressed to prevent direct or residual disclosure of identifiable data.

Revisions and seasonal adjustment

With each release, data for the previous two quarters may have been revised. This index is not seasonally adjusted.

Data accuracy

The statistical accuracy of this index depends on price and weight data obtained from sample surveys. Each type of input data is subject to its own errors. Processing procedures for editing and imputation are in place to ensure the quality of data. Consequently, the aggregate indexes at all levels are considered to be statistically reliable.

Documentation

  • Concordance table between the old and new CANSIM vectors
    With the release of third quarter 2014 data, Statistics Canada converted the MEPI series to a base year of 2010=100.

    This table contains a concordance between vectors in the 1997 and 2010 baskets, where available. Given that the classification system in the two baskets is different, an indicator was assigned to each matched vectors to indicate their level of comparability.
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