Monthly Trade Report – February 2024

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Highlights

• In February, there was a notable 5.0% increase in goods and services exports, along with a 3.7% growth in imports. Following declines across numerous categories in January, February saw widespread growth.
• Goods exports increased in 9 of the 11 product categories, led by metal and non-metallic mineral products (mainly unwrought gold). Meanwhile, service exports also increased with strong growth in travel and transportation services.
• Goods imports were up in all but one category, with electronic and electrical equipment and parts, consumer goods, and energy products being the largest contributors. Service imports edged up slightly with notable growth in transportation services.
• In February, goods trade with the U.S. rebounded, while trade with countries outside the U.S. surged, particularly exports to Switzerland and the UK and imports from several Asian countries as well as the UK.
• Excluding price effects, the volumes of goods exports rose 6.2%, and import volumes increased 4.0%.

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

Industry view - exports

Exports were up in 9 of the 11 product categories and 3 of the 4 service sectors.

Exports of metal and non-metallic mineral products contributed the most to the growth in goods exports, increasing by 31.1% in February to a record $9.4 billion. A surge in unwrought gold exports contributed to more than half of the growth in total goods exports. Increased shipments of refined gold, as well as transfers of gold assets in the banking sector, were observed in February, which coincided with a sharp rise in the market price of gold.

Exports of farm, fishing and intermediate food products posted the strongest percentage increase observed since July 2023, mainly from rebounding wheat exports to Asia.

Motor vehicles and parts exports also rose 3.8% in February, driven by passenger cars and light trucks exports.

Meanwhile, exports of travel services rose by 6.9% on higher visitor spending in Canada. Exports of transportation services also recorded a 5.3% increase, while commercial services were down 0.8%.

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

Industry view - imports

Imports increased in 10 of 11 product categories and in 3 of the 4 service sectors.

Imports of electronic and electrical equipment and parts increased 9.7% to a record $7.6 billion in February, supported by increased imports of high-value data processing units (servers). Other large contributors to the growth included consumer goods, which increased by 3.3% in February due to widespread gains, as well as energy products, which increased by 10.2% mainly from higher crude oil imports. Metal and non-metallic mineral products edged down slightly by 0.6% and was the only product category that contracted in February.

For services, transportation services imports posted the fastest growth of 5.9%, driven by maritime transportation services for goods entering Canada. Imports of commercial services declined 0.4%, due mainly to lower payments of financial services.

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

Global markets

In February, Canadian goods exports to the United States rose by 3.3%, while imports from the United States increased by 3.4%. As a result, Canada's goods trade surplus with the United States widened slightly from $8.8 billion in January to $9.1 billion in February.

Goods exports to countries other than the United States surged by 14.2% in February, mainly driven by a strong increase in unwrought gold exports to Switzerland and the United Kingdom.

Meanwhile, goods imports from countries other than the United States increased by 6.7%. Significant increases in imports were observed for China (various products), the United Kingdom (aircraft), Indonesia (scrap of non-ferrous metals) and South Korea (passenger cars and light trucks).

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

Prices and volumes

Both good exports and imports grew in real terms in February.

Goods export volumes climbed 6.2%, while export prices fell by 0.4%. The growth in the exports of metal and non-metallic mineral products, which was this month’s largest contributor to overall growth in goods export values, was primarily driven by volumes. Exports of this category grew 28.6% in terms of volumes, which eclipsed its export price growth of 2.0%.

Goods import volumes also grew considerably in February (+4.0%), while prices only inched up 0.5%.

In February, the Canadian-US dollar exchange rate fell slightly to 74.1 US cents per Canadian dollar. 

The average monthly price of crude oil for Western Canada Select (WCS) increased for a second consecutive month in February, reaching $78.6 per barrel and marking a 13.7% increase from the previous month.

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

What to watch

• Rerouted vessels around Africa have caused shipping delays and increased shipping costs since the start of the Red Sea attacks. While global maritime shipping prices have come down from their mid-February peak, prices remain elevated.
• Canada’s Consumer Price Index (CPI) rose by 2.8% year-over-year in February, slightly lower than January’s 2.9% increase. Conversely, the United States experienced an uptick in year-over-year CPI growth, accelerating from 3.1% in January to 3.2% in February. The Bank of Canada will announce its next rate decision on April 10, followed by the Federal Reserve on May 1.
• As of April 1st, Canada's carbon price increased from $65 to $80 per tonne. Even amidst higher fuel and gas costs, estimates from the Bank of Canada suggest that the carbon tax has a minimal impact on inflation.
• The federal budget is set to be unveiled on April 16, which will include a $6 billion infrastructure fund aimed at boosting housing announced earlier this week. Key features of several provincial budgets have included measures to increase affordability, access to housing, and services (health and education).
• The collapse of the Francis Scott Key Bridge in Baltimore at the end of March is affecting shipping in the region. Preliminary analysis suggests that the disruptions are unlikely to have a significant impact on global shipping prices or the Canadian economy, but the Port of Halifax may see increased volumes.