Canada Unexpectedly Posts Trade Deficit

Canada trade deficit narrowed to CAD 0.42 billion in September of 2018 from a revised CAD 0.55 billion trade gap in the previous month and against market expectations of a CAD 0.15 billion surplus. Exports edged down 0.2 percent, due to consumer goods while imports fell at a faster 0.4 percent, dragged down by aircraft and other transportation equipment and parts and energy products.

Exports from Canada edged down 0.2 percent month-over-month to CAD 50.4 billion in September of 2018, despite increases in 6 of 11 product sections. Export volumes fell 1.2 percent, while prices were up 1.1 percent. Sales of consumer goods decreased 3.9 percent to CAD 6 billion, namely other food products (-10.7 percent), as lentils and peas. On the other hand, export of energy products rose 2.3 percent, as refined petroleum products (+10.6 percent), mostly on the strength of heavy fuel oil exports to the United States; and crude oil exports (+1 percent). Higher prices (+5.6 percent) were behind the increase in crude oil exports in September, while volumes decreased 4.3 percent. Exports excluding energy products fell 0.8 percent, a second consecutive monthly decline. Year over year, total exports increased 15.7 percent.

Exports to the United States went up 0.4 percent to CAD 37.8 billion and exports to other than the US declined 1.8 percent to CAD 12.5 billion, particularly to Hong Kong, Italy, India and Spain. These declines were partially offset by a sharp increase in exports to China. 

Imports to Canada fell at a faster 0.4 percent from the previous month to CAD 50.8 billion, despite gains in 6 of 11 product sections. Import volumes decreased 1.5 percent, while prices rose 1.1 percent. Purchases of aircraft and other transportation equipment and parts declined by 28.3 percent, due to a CAD 598 million decrease in imports of ships. Three icebreakers were imported from Sweden at the end of August, followed by none in September. Excluding the imports of these ships in August, total imports would have risen 0.8 percent in September. Additionally, imports of energy products went down 11.5 percent, as crude oil imports drop 13.2 percent, mainly due to lower imports from Saudi Arabia and the United Kingdom; and refined petroleum energy products (-18.9 percent). Year over year, total imports increased 8.5 percent.

Imports from the United States rose 1.2 percent to CAD 33.1 billion, partly on the strength of higher imports of gold. From other countries than the US, purchases fell 3.3 percent to CAD 17.7 billion, namely Sweden, Japan, Switzerland and Mexico, while those from China increased. 

Canada Unexpectedly Posts Trade Deficit

Statistics Canada | Agna Gabriel |
11/2/2018 1:27:18 PM