Canada Trade Gap Larger than Expected

Canada trade deficit widened to CAD 1.17 billion in October 2018 from an upwardly revised CAD 0.89 billion trade gap in the previous month. It compares with market expectations of a CAD 0.7 billion shortfall. Exports fell 1.2 percent, the third consecutive monthly decline, principally on lower exports of crude oil. Meanwhile imports were down 0.6 percent, mainly due to fewer imports of passenger cars and light trucks.

Exports from Canada fell 1.2 percent month-over-month to CAD 49.32 billion in October 2018, despite increases in 7 of 11 sections. It was the third consecutive month decline in Canadian exports, as sales of energy products slumped 12.4 percent to CAD 8.8 billion, mainly crude oil (-16.2 percent). Crude oil export prices were down 15.4 percent, the most since February 2016, as discounts for Canadian produced crude oil deepened. On the other hand, exports of motor vehicles and parts were up 4.4 percent to CAD 7.8 billion, driven by higher sales of passenger cars and light trucks (+6.6 percent); and exports of farm, fishing and intermediate food products increased 4.8 percent to CAD 3.4 billion, mainly canola. 

Exports to the United States went down 2.3 percent to CAD 36.5 billion and exports to other than the US increased 2.3 percent to CAD 12.9 billion, particularly to Hong Kong and Japan; while those to the UK decreased. 

Imports to Canada went down 0.6 percent from the previous month to CAD 50.49 billion, the fourth decrease in the past in the past five months. Declines were observed in 7 of 11 sections. Purchases of motor vehicles and parts declined 3.5 percent to CAD 9.1 billion, namely passenger cars and light trucks (-5.8% to CAD 3.9 billion) and electric cars. Additionally, basic and industrial chemical, plastic and rubber products declined 4.5 percent to CAD 4 billion, as lubricants and other petroleum refinery products decreased 13.6 percent, on the back of lower imports of crude oil diluents from the United States. Contrarily, imports of aircraft and other transportation equipment and parts rose 11.3 percent to CAD 1.7 billion. 

Imports from the United States rose 1.3 percent to CAD 33.4 billion; from other countries than the US, purchases fell 4.1 percent to CAD 17.1 billion, namely China, Japan, the UK and Saudi Arabia.

Canada Trade Gap Larger than Expected

Statistics Canada | Agna Gabriel |
12/6/2018 2:30:36 PM