Canada Trade Gap Widens More than Expected in November

Canada’s merchandise trade deficit widened to CAD 2.06 billion in November 2018 from a downwardly revised CAD 0.85 billion in the previous month and above market consensus of a CAD 1.95 billion shortfall. It was the largest trade gap since May, as exports fell 2.9 percent month-over-month, mainly due to lower sales of crude oil and imports dropped 0.5 percent.

Exports from Canada declined 2.9 percent month-over-month to CAD 48.3 billion in November. It was the fourth consecutive monthly decrease, as exports were down in 8 of 11 sections with energy products contributing the most to the decline. Exports excluding energy products went down 1.4 percent, after falling 6.7 percent in October and sales of energy products fell 9.2 percent to CAD 8.4 billion, namely crude oil (-17.7 percent). Lower sales of crude oil were partially offset by higher exports of coal to South Korea, China and Vietnam. Also, sales of basic and industrial chemical, plastic and rubber products dropped 7.5 percent to CAD 2.8 billion, mainly due to lubricants and other petroleum refinery products (-26.4 percent), mostly on lower exports of motor gasoline blending stock to the northeastern United States. Additionally, sales of forestry products and building and packaging materials fell 5.7 percent, mainly pulp and paper (-10.1 percent).

Exports to the US decreased 3.9 percent in November to CAD 35.3 billion, due to lower sales of crude oil. Meanwhile, exports to countries other than the US rose 0.1 percent to CAD 13.0 billion. A sharp increase in exports to the United Kingdom was almost entirely offset by lower exports to Hong Kong, Netherlands and China.

Imports to Canada dropped 0.5 percent from the previous month to CAD 50.4 billion. Purchases of motor vehicles and parts declined 2.8 percent to CAD 8.9 billion mostly due to imports of passenger cars and light trucks (-5.5 percent). In addition, purchases fell for metal ores and non-metallic minerals (-18.6 percent to CAD 1.1 billion); other metal ores and concentrates (-19.6 percent), mostly on lower imports of gold for refining from the US. On the other hand, imports increased for aircraft and other transportation equipment and parts (21.2 percent to CAD 2.1 billion), as purchases of aircrafts  were up for a third consecutive month, mainly on the strength of higher imports of airliners.

Imports from the US went down 0.3 percent to CAD 33.2 billion and purchases from countries other than the US fell 0.8 percent to CAD 17.2 billion in November. Lower imports from Russia, Switzerland and Mexico were partially offset by higher purchases from China and Japan.

Canada Trade Gap Widens More than Expected in November

Statistics Canada | Stefanie Moya |
1/8/2019 1:55:35 PM