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Monthly Trade Report – January 2024

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Highlights

Data: Statistics Canada Tables 12-10-0011-01 and 12-10-0144-01. Balance of payments basis, seasonally adjusted.

Industry view - exports

Exports were down in 8 of the 11 product categories and 2 of the 4 service sectors.

Exports of metal and non-metallic mineral products fell 6.2%, contributing the most to the overall decline in goods exports. The decline was broad-based with many different metals dropping in January. Meanwhile, exports of aircraft and other transportation equipment and parts decreased by 13.9%, as aircraft exports fell 25.4% following a 27.9% spike in December and a strong 2023 – the second highest year for aircraft exports on record. Large fluctuations in aircraft exports largely reflect its seasonal nature and the timing of delivery.

Partially offsetting these declines were increases in the exports of consumer goods and motor vehicles and parts which grew 3.6% and 2.6% respectively.

Meanwhile, exports of travel services decreased by 6.4%, driven by lower visitors’ spending in Canada, while transportation services dropped 3.0%. In contrast, commercial services inched up 0.7% in January.

Data: Statistics Canada Tables 12-10-0121-01 and 12-10-0144-01. Balance of payments basis, seasonally adjusted.

Industry view - imports

Imports were down in 7 of the 11 product categories but increased in 3 of the 4 service sectors.

Following an atypical surge in December, imports of pharmaceutical products dropped 19.0%, contributing to a 9.8% decline in the consumer goods category. Meanwhile, imports of metal and non-metallic products fell 9.2%, due to lower imports of gold and gold powder.

Imports of motor vehicles and parts recorded its fourth consecutive monthly decline after peaking in September 2023, declining 5.2%. This happened amid a slowdown in global auto production driven by plant retooling, supply issues, cooling demand, and strikes.

In terms of services imports, travel services were up 3.9% due to higher spending by Canadian resident travellers returning from the U.S. Commercial services were up 1.0% on higher payments for financial services.

Data: Statistics Canada Tables 12-10-0121-01 and 12-10-0144-01. Balance of payments basis, seasonally adjusted.

Global markets

Canadian goods exports to the U.S. dropped 1.0% in January, primarily because of lower exports of aircrafts. Goods imports decreased 1.7%, on the back of ongoing weakness in auto imports and fluctuations in pharmaceutical imports between December and January. As imports declined more than exports, Canada’s goods trade surplus with the U.S. widened slightly from $8.6 billion in December to $8.8 billion in January.

Goods exports to countries other than the U.S. fell 4.2% in January, with notable declines observed in exports to Italy (aircraft and pharmaceutical products), China (coal), Norway (nickel) and Germany (crude oil).

Goods imports from countries outside of the U.S. declined 7.3% in January, partly because of lower imports from East Asia, particularly China (various products) and South Korea (passenger cars and light trucks). As a result, Canada’s goods trade deficit with countries other than the U.S. narrowed from $9.4 billion in December to $8.3 billion in January.

Data: Statistics Canada Table 12-10-0011-01. Balance of payments basis, seasonally adjusted.

Prices and volumes

The decline in the value of goods trade was largely due to lower export and import volumes. Striping out the effect of prices, goods export volumes decreased by 1.8%, while import volumes experienced a significant drop of 4.1%. Meanwhile, there was a marginal increase in goods export and import prices.

From December to January, the Canadian-US dollar exchange rate remained stable, holding at 74.5 US cents per Canadian dollar.

Following a downward trend since September, the average monthly price of crude oil for Western Canada Select (WCS) saw an uptick in January, reaching $74.3 per barrel, marking a 5.8% increase from the previous month.

Data: Statistics Canada Table 12-10-0168-01. Balance of payments basis, seasonally adjusted.

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