Machinery and Equipment Price Index

Detailed information for second quarter 2005





Record number:


The Machinery and Equipment Price Index (MEPI), provides quarterly estimates of price changes for machinery and equipment purchases, relative to annual gross additions to capital by Canadian Industry of purchase.

Data release - August 16, 2005


The Machinery and Equipment Price Index (MEPI), provides quarterly estimates of price changes for machinery and equipment purchases, relative to annual gross additions to capital by Canadian Industry of purchase. The MEPI is used by the Canadian System of National Accounts 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 Canadian purchasers. This information is organized from both the industry and commodity perspectives. In addition, the MEPI tracks these price movements on a domestic and imported basis.

Reference period: The reference period of the MEPI is the quarter associated with a specific level of the index with a given time base. For example, the MEPI for the third quarter of 2000 is 133.2 (1986=100).

Collection period: For most products, the collection process occurs on a monthly basis.


  • Machinery and equipment price indexes
  • Prices and price indexes

Data sources and methodology

Target population

The universe for the MEPI consists of all manufacturers and distributors of machinery and equipment purchased in Canada.

Instrument design

Commodity specialists mostly collect price data through the form of mail-out price reports, which contain technical descriptions or specifications for the selected products, originally supplied by the respondent (e.g. Ready-mix concrete, 20mpa, cold mix without heating charge or additives). In addition to the commodity description, the report outlines the terms of sale for which the price applies (e.g. Price per cubic metre to local contractor, all taxes extra, f.o.b. local area, Can$). The price report was developed in the mid 1980's by Prices Division analysts in conjunction with the feedback received from respondents.


This is a sample survey with a longitudinal design.

The sampling frame for the MEPI is based on the survey frame available from the Annual Survey of Manufacturers (ASM). The most common survey unit is the "establishment", which is the smallest unit of an organisation that can provide the basic data required for industry statistics, most commonly an individual plant or factory.

Data sources

Responding to this survey is mandatory.

Data are collected directly from survey respondents.

The prices of most of the commodities surveyed for the MEPI are collected monthly, usually over a three-week period. In an effort to minimise respondent burden, prices are collected less frequently in those cases where price changes occur normally at other intervals (e.g. quarterly or annually). For the import price indexes component of the MEPI, producer price index series from U.S. Bureau of Labour Statistics are employed.

In the case where, for a particular commodity, there are no prices collected due to either an insignificant level of production in Canada or a lack of respondent co-operation, proxies series are constructed. Proxy series may consist of several other reported series combined together, or use similar representative price indexes from another program or statistical agency (the Canadian Consumer Price Index and the U.S. Bureau of Labour Statistics indexes are the most common sources).

View the Questionnaire(s) and reporting guide(s) .

Error detection

In the day-to-day collection and processing of these indexes, great emphasis is placed on the examination and evaluation of prices. Commodity specialists watch closely developments in the markets. They review the behavior of the reported price changes, both to validate them directly and to ensure they are representative of the product price movement as a whole. Outliers and incorrect or suspicious prices are identified during the initial data processing and then verbal follow-ups are carried out with the respondents to ensure the appropriate information has been obtained.


Imputation is generally carried out for missing data. In any given pricing period, there will be price reports that are missing, due to the fact that respondents are late reporting. In this situation, either the last reported price quotation will be carried forward or an estimate will be made based on other information (e.g. using other responses as a proxy).



The expenditure weights for the 43 industries and 79 commodities represent outlays for the years 1979 to 1983 at 1986 prices. They were derived from Input-Output data, which were themselves derived largely from the series of capital expenditure values by industry reported in the annual survey "Private and Public Investment in Canada" conducted by the Investment and Capital Stock Division.


The prices used for domestic machinery and equipment are manufacturer's selling prices free on board (f.o.b.) plant on new orders in the middle of the month. The prices for imported machinery and equipment are represented by the U.S. Bureau of Labour Statistics producer price indexes. Domestic and foreign prices are adjusted for changes in the federal sales tax (FST) for the period ending with the first quarter of 1991, when the FST was eliminated. From 1991 forward, adjustment are made using the effective rate of the goods and services tax (GST). The foreign price indexes are also adjusted for changes in the exchange rate and custom tariffs.

Quality evaluation

The statistical accuracy of the MEPI depends on price data and weight information. Price data are obtained from a sample survey and other statistical sources, while the weights are estimated from the Input-Output Table (Input-Output Structure of the Canadian Economy in Current Prices (survey number 1401). Both kinds of input data are subject to their own errors.

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 are converted to price indexes and data are released as such, so that it is not possible to identify the suppliers of raw prices.

Revisions and seasonal adjustment

The most recent five quarters are subject to revision.

Data accuracy

Though the MEPI uses a sample survey methodology to obtain the necessary data, confidence levels are not currently estimated, due to the longitudinal nature of price index series. Indexes for all levels of aggregation are considered to be statistically reliable.


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