Machinery and Equipment Price Index (MEPI)

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.

Detailed information for third quarter 2014

Data release - December 8, 2014

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.

Sampling

MEPI is based on a list of commodities and industries from the IOCC and IOFDC for the machinery and equipment categories. Indexes are calculated for 56 commodities and 66 industries and industry groups for the MEPI (2010=100). An index for each of the MEPI categories is derived from price data extracted from Statistics Canada surveys and other sources.

Data sources

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

The MEPI does not have its own specific questionnaires. Price data are extracted from other Statistics Canada programs or surveys (e.g. Industrial Product Price Index (2318), Computer and Peripherals Price Indexes (5032)) for the domestic component of the MEPI. For the import component of the MEPI, producer price and import indexes published by the U.S. Bureau of Labor Statistics (BLS) are employed.

Data are collected monthly and the quarterly indexes are calculated as the average of the monthly indexes for the quarter.

Error detection

In the monthly collection and processing of these index series, great emphasis is placed on the examination and evaluation of prices. Outliers are identified during the initial data processing and then verified against the data sources to ensure that the appropriate information has been obtained.

Imputation

Missing data is generally estimated by an imputation process. In any given period, there may be price data that are missing. This may be the case for the producer price and import indexes published by the U.S. BLS and used by the MEPI for the import component, as some series may not be published for some months or cease to be published altogether. In this situation, either the last price quotation will be carried forward, or similar series will be used to replace the ones that are terminated by the U.S. BLS.

Estimation

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.

Historical series

The MEPI (2010=100) adopted the 2009 IOCC and IOFDC incorporated in the current IO tables of the CSNA for machinery and equipment categories. With the 2012 historical revision of the CSNA, the classifications incorporated in the IO tables published by Statistics Canada have been updated. For more information regarding the changes applied to the IO tables, see the document Modernization of the Input-output Tables under Additional documentation (link below).

The update of the classifications was triggered by the need to capture the evolving structure of the Canadian economy and to align the classifications to updated international classification systems (such as the North American Industry Classification System and the North American Product Classification System). As a result, some historical series can no longer be calculated.

The historical series consist of all data for the quarters prior to the first quarter of 2010. Because of the changes in the IOCC and IOFDC, where possible, historical series were obtained by linking together indexes from the 2010-based MEPI series and the corresponding 1997-based MEPI series in order to have as much historical information as possible. These historical series were obtained by rebasing the 1997-based MEPI series using, as the rebasing factor, the ratio of 100 to the annual average index of 2010.

Quality evaluation

The statistical accuracy of the MEPI depends on price data and weight information. Price data are obtained from Statistics Canada surveys and other sources, while the weights are derived from the final demand matrix of the IO tables compiled by the CSNA. Both kinds of input data are subject to their own errors.

Much time and effort is devoted to detecting and following up unusual fluctuations over time in the pricing patterns of commodities and industries. Prior to dissemination, the price indexes are analyzed and historic trends reviewed.

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 confidentiality rules are applied to all data 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.

Collected data will be converted to price indexes and data will be released as such, so that it will not be possible to identify the suppliers of the original raw data used to derive information on prices.

Revisions and seasonal adjustment

The MEPI allows the comparison in percentage terms, of prices in any given time period to prices in the base period, currently 2010=100.

The most recent two quarters of the MEPI are subject to revision.

Data accuracy

Because of the methodology used to calculate the MEPI, confidence intervals are not calculated. Indexes for all levels of aggregation 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.