Machinery and Equipment Price Index (MEPI)

Detailed information for third quarter 2022

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 - November 15, 2022

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 2016.

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 product 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 Supply-Use tables (SUT), that is the Supply-Use Product Classification (SUPC).

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).

Instrument design

Not applicable.

Sampling

MEPI is based on a list of products and industries from the SUPC and IOFDC for the machinery and equipment categories. Indexes are calculated for 61 products and 65 industries and industry groups.

Data sources

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

Data are collected from other Statistics Canada index programs (the Industrial Product Price Index, the Computer and Peripherals Price Indexes and the International Merchandise Trade Price Index).

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 is 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 Gross Domestic Product (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 estimated based on producer prices. These are prices collected for goods sold at the factory gate excluding taxes, tariffs, transportation costs, etc.

Weights
For the MEPI, product and industry weights are derived from the shares of capital investment by industries in Canada for year 2016, valued at 2016 purchaser prices. The weights are derived from the final demand matrix of the supply-use tables compiled by the CSNA (Input-Output Structure of the Canadian Economy in Current Prices, record number 1401).

Indexes
Two sets of price indexes are produced. The first set of indexes is produced by product and classified according to the 2016 SUPC. The second set of indexes is produced by industry and classified according to the 2016 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 take the appropriate measures to ensure that the survey's coverage is thorough. Particular attention is also given to ensuring that sampled products or services are representative of actual transactions taking place in the market. 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 activities include the analysis of price changes period-over-period and the analysis of trends at the business/company, industry, subsector and sector levels, the certification of key contributors to price change as well as the 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 insight into 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 MEPI uses data derived from other Statistics Canada surveys and other sources based on a methodology designed to control for errors and reduce their effect on estimates. 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.

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