Data quality, concepts and methodology

Machinery and Equipment Price Index

(Tables 327-0041, 327-0042, 1997=100, quarterly, 1997 to present)
Introduction
The Machinery and Equipment Price Index (MEPI) measures price change for annual
gross additions to capital for machinery and equipment by industry of purchase. Price
indexes are calculated for industries, major groups of industries, and the total for all
industries, and are also calculated for commodities. Price movement is measured on a
domestic and an import basis.

The industry and commodity designations used are those of the Input-Output Tables
of the Canadian System of National Accounts. The classification system is the 1997
North American Industry Classification System (NAICS).
Industry total indexes are presented in table 8-1 ; commodity detail is presented in
table 8-2.

Characteristics
Prices used
Prices for domestic machinery and equipment are manufacturers selling prices f.o.b.
plant on new orders as of the middle of the month.
Prices for imported equipment are represented by the producer price indexes of the U. S.
Bureau of Labor Statistics, and by a few price series from other foreign countries.
Adjustments to price indexes
Domestic and foreign price indexes are adjusted for changes in the effective rate of GST.
The effective rate is the net GST tax (the tax levied on a commodity in a particular
industry minus the rebated portion) divided by the value of the purchase. For most
industries, the effective GST rate approaches zero per cent. Foreign price indexes are also
adjusted for changes in exchange rates and custom tariffs where applicable.
Derivation of weights

The expenditure weights for the 51 industries and 106 commodities represent capital
investment for the year 1997, valued at 1997 purchaser prices. They were derived
from Input-Output data, which were themselves derived largely from the series of
capital expenditure by industry, reported in the annual survey, Capital and Repair
Expenditures, Actual, Preliminary Actual and Intentions (survey number 2803)
Investment and Capital Stock Division.

In general, below the commodity level of detail, equal weights were assigned to
component indexes.
Index formula
From 1997 forward, the MEPI series are fixed-weighted price indexes of the general type
described in the introduction to this catalogue, with both the time and weight base being
1997.
Revisions
The most recent four quarters are subject to revision.
Historical data
Historical 1971=100 quarterly series are publicly available on CANSIM in tables 3270021, 327-0022 and 327-0023.
Historical 1986=100 quarterly series are publicly available on CANSIM in tables 3270013, 327-0014 and 327-0016.
Reference Documents
Catalogue 62-552-XPB; Machinery and Equipment Price
Indexes by Industry of Purchase, 1971-1979
For Further Reading
National income and expenditure accounts, quarterly,
13-001-XIB, XPB
Gross domestic product by industry, monthly, 15-001-XIE
Private and public investment in Canada, intentions,
annual, 61-205-XIE
The input-output structure of the Canadian economy, 15-201 X1E
Industry price indexes, monthly, 62-011-XIE, XPB
For further information contact Client Services (613) 951-9606,
Internet e-mail: infounit@statcan.ca
Prices Division, Statistics Canada, Ottawa, K1A 0T6.