February 3, 2015 / 1:58 PM / in 4 years

Canada December factory prices show biggest drop in six years

An oil pump jack pumps oil in a field near Calgary, Alberta, July 21, 2014. REUTERS/Todd Korol

OTTAWA (Reuters) - Canadian producer prices in December took their biggest fall since the onset of the global financial crisis in 2008, hurt by the cheaper cost of energy and petroleum products, Statistics Canada said on Tuesday.

The industrial product price index fell 1.6 percent in December, a steeper decline than economists’ expectations of 0.5 percent and its fourth monthly decrease in a row.

This was the biggest monthly drop for the index since a 2.6 percent decrease in December 2008, the agency said. Prices fell 0.5 percent from a year earlier, and November’s figures were revised down to a decline of 0.5 percent.

Prices for energy and petroleum products slumped 11.5 percent, led by a sharp decline in motor gasoline.

Between June and December, the price of motor gasoline shed 31.5 percent as increased global production and decreased demand put downward pressure on petroleum products. Since June, the price of U.S. crude CLc1 has more than halved, roiling markets and raising concerns about the health of the economies of Canada and other major oil exporters.

A drop in prices for crude energy products also weighed on the raw material price index, whose drop of 7.6 percent as its biggest since December 2008. Still, that was not as steep as the 8 percent decline that had been forecast.

Reporting by Leah Schnurr; Editing by Lisa Von Ahn

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