Monthly Merchandise Trade Report

Monthly Report on Canada's International Merchandise Trade Performance, October 2016

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ISSUE

  • Canadian merchandise imports fell 6.3% in October, after an exceptional increase in imports in September due to the Hebron project, to return to previous levels.
  • In October, exports were up 0.5% to $43.6 billion.
  • Canada’s merchandise trade deficit narrowed to $1.1 billion in October, the smallest since January 2016, from a record of $4.4 billion in September.

IN BRIEF

  • Canada’s trade surplus with the U.S. widened again in October, from $2.5 billion in September to $3.0 billion.
  • Both exports and imports from countries other than United States were lower in October.
  • Imports in October were at their lowest level since February 2015. The lasting weakness in imports is likely a reflection of the weakness in business investment during this period.

 KEY POINTS

  • Canada registered its smallest deficit since January 2016.
  • Exports to the United States increased 1.6%.
  • Exports of energy products increased 5.5% to $6.5 billion, the eighth consecutive monthly increase.
  • Year-to-date exports were $428.2 billion, down 1.9% from a year ago and imports, at $456.5 billion, were unchanged (0.0%) from last year. The trade deficit is at $28.3 billion, $8.3 billion greater than a year ago.

 Chart 1: Value of Canada's trade in goods, Oct. 2011 to Oct. 2016Canada-U.S. Trade in Billions of Dollars

 Background

Canadian Merchandise Exports

Canadian merchandise exports increased 0.5%, to $43.6 billion, as a 1.2% increase in prices was partially offset by a 0.7% decline in volumes. Exports increased in October, despite decreases in 7 of 11 sectors. Higher exports of energy products, up 5.5% (or $342 million) and motor vehicles and parts, up 3.2% (or $250 million) were partially offset by lower exports of consumer goods, down 3.2% (or $199 million) and aircraft and other transportation equipment and parts, down 4.5% (or $89 million), to lead to an overall increase of $222 million. Year-to-date, total exports are down 1.9%, or $8.9 billion, over the January-October period of 2015. Exports were lower in October to United Kingdom (down $469 million), on fewer exports of precious metals.

Canadian Merchandise Imports

Canadian merchandise imports: following September’s record high related to an exceptionally large shipment of industrial machinery, equipment and parts, imports fell 6.3% to $44.7 billion in October, as volumes decreased 6.2% and prices edged down 0.1%. Imports were down in 7 of 11 sectors, led by industrial machinery, equipment and parts, down 42% (or $2.9 billion), energy products, down 11.6% (or $258 million) and metal ores and non-metallic minerals, down 12.5% (or $120 million). Year-to-date, imports are virtually unchanged (down $138 million, or 0.0%) over the same period last year.

  • Imports declined in 8 out of 11 major sectors, but one large shipment of a module from South Korea destined for an oil project in Newfoundland offset declines elsewhere. Hence, industrial machinery, equipment and parts imports (up $2.9 billion) led sectoral increases for the month. Motor vehicles and parts (down $236 million) and aircraft and other transportation equipment and parts (down $210 million) led declines.
  • Geographically, imports from 8 out of 10 of Canada’s major trading partners declined. Imports from South Korea (up $2.9 billion) spiked, offsetting losses elsewhere. Imports from the U.S. (down $325 million) and the United Kingdom (down $171 million) posted the largest declines for the month.  

United States

  • In October 2016, Canada’s trade surplus widened from $2.5 billion in September to $3.0 billion.
  • Exports to United States increased 1.6%, led by crude oil and crude bitumen.
  • Imports from United States edged down 0.1% to $29.7 billion.
Changes in Canadian Trade: monthly, year-to-date and by principal trading partners
October 
  2016
Exports
($ millions)
Monthly  
Change
Year-to-date 
% change
previous year 
Imports
($ millions)
Monthly
Change
Year-to-date 
% change
previous year 
All Countries

           43,576

222-1.944,706-1380.0
% Changen.a.0.5%n.a.n.a.-6.3%n.a.
Volume changen.a.-0.7%n.a.n.a.-6.2%n.a.
Price changen.a.1.20%n.a.n.a.-0.1%n.a.
       
United States32,750523-2.129,734-1,609-0.5
Mexico730-7713.31,6003312.1
EU3,484-2764.34,381-663-1.5
  United Kingdom1,574-46810.7656-1,012-13.7
  Germany385256.21,159-46-0.4
  France288-53.2359-120-3.1
India44540-11.1227-9-0.3
China1,787470.63,304-1,378-4.2
Japan876-168.01,0596006.6
South Korea340-264.84072,65251.0

Source: CANSIM Table 228-0069, Merchandise imports and exports, Balance of payments basis, seasonally adjusted, current dollars.

Countries other than United States:

  • Trade with countries other than United States was lower than in September.
  • Exports to non-US countries decreased 2.7%, to $10.8 billion, led by lower exports to United Kingdom (down $469 million), on fewer exports of precious metals.
  • Exports to Brazil were also lower, but were up to Saudi Arabia and the Netherlands.
  • Imports from non-US countries fell 16.7% to $15.0 billion in October.
  • Imports from South Korea fell $3.0 billion, representing a return to more normal levels. Additionally, imports from Algeria and Saudi Arabia were lower, but higher from China and Switzerland.
  • As a result, Canada’s trade deficit with countries other than the US narrowed from $6.8 billion in September to $4.1 billion in October.

Commodities

Despite decreases in 7 of 11 sectors, exports recorded gains in October. Total exports rose 0.5%, to $43.6 billion; a gain of 1.2% in prices was partially offset by 0.7% decline in volumes.
  • Export highlights
  • Export of energy products increased 5.5% to $6.5 billion (eighth consecutive monthly increase).
  • Export of crude oil and crude bitumen rose 5.5% to $4.3 billion, on higher prices.
  • Export of other energy products also increased, up 50.7% to $412 million, mostly on higher exports of coal to India, Taiwan and the Netherlands.
  • Exports of motor vehicles and parts rose 3.2% to $8.0 billion, driven by passenger cars and light trucks, up 4.2% to $5.5 billion.
  • Exports of consumer goods were down 3.2% to $6.0 billion.
  • Exports of pharmaceutical and medicinal products decreased 28.5% to $760 million, their lowest level since April 2015 on fewer exports to United States, Brazil and Japan.
  • Exports were lower for aircraft and other transportation equipment and parts, down 4.5% to $1.9 billion, although exports of boats and other personal transportation equipment were up $170 million, to a record $349 million, mostly on higher exports to Saudi Arabia.
  • In October, imports were down 6.3% to $44.7 billion with declines in 7 of 11 sectors. Import volumes decreased 6.2% and prices edged down 0.1%.
  • Import highlights
  • Imports of energy products fell 11.6% to $2.0 billion for the third consecutive decrease.
  • Imports of crude oil and crude bitumen were down 34.8% to $735 million (lowest level since February 2016).
  • Imports of electronics and electrical equipment and parts were up 1.6% to $5.3 billion.
  • Imports of communications and audio and video equipment increased 5.6% to $1.8 billion, on higher imports of cell phones from China and Vietnam.
  •  
    Exports and Imports by commodities–Oct. 2016 and % change Jan. 2016 to Oct. 2016
    Commodity
    October 2016
    Exports
    ($ millions)
    Year-to-date 
    % change
    previous year
    Imports
    ($ millions)
    Year-to-date 
    % change
    previous year
    Resource Products21,352-9.2%      13,545 -4.8%
      Energy6,527-23.0%      1,966-16.4%
    Non-resource Products21,0076.2%      29,452 2.3%
      Industrial Machinery & Equipment2,7630.7%        4,0240.1%
    Electronic./Electric. Machin. & Equip.2,3201.7%        5,259-0.4%
      Motor Vehicles8,04213.6%        9,0017.5%
      Aircrafts/Other Transportation Equip.1,875-8.2%        1,314-6.7%
      Consumer Goods6,0076.7%        9,8541.9%
    All commodities43,576-1.9%      44,706 0.0%