Canada December Trade Gap Larger Than Expected



Canada's merchandise trade deficit with the world totaled CAD 3.2 billion in December, widening from a CAD 2.7 billion deficit in November while markets were expecting a CAD 2.2 billion shortfall. Imports rose 1.5 percent, underpinned by higher purchases of energy products and industrial machinery, equipment and parts. Meantime, exports were up 0.6 percent, driven by sales of energy products and metal and non-metallic mineral products.

Total imports were up 1.5 percent to a record CAD 49.7 billion in December, with increases in 9 of 11 sections. Imports of energy products were up 16.9 percent  to CAD 3.0 billion in December. Crude oil and crude bitumen imports increased 23.9 percent, while refined petroleum energy products rose 17.8 percent, mainly on higher imports of diesel and fuel oils. Purchases of industrial machinery, equipment and parts also grew 6.3 percent to CAD 5.0 billion. Imports of logging, mining and construction machinery and equipment led the way, rising 24.6 percent to a record CAD 897 million, the third consecutive monthly increase. These gains precede new emissions regulations affecting off-road diesel engines and machines. As of January 1, 2018, imports of equipment not meeting the new standards are no longer permitted

Meanwhile, imports of aircraft and other transportation equipment and parts were down 23.4 percent in December to CAD 1.7 billion, after two strong monthly increases, as fewer airliners were imported from the United States.

Imports from the United States fell 1.3 percent to CAD 31.5 billion in December. Following a 5.6 percent increase in November, imports from countries other than the United States rose 6.8 percent to CAD 18.2 billion in December, notably due to higher imports of passenger cars and light trucks from Germany as well as refined petroleum energy products from the Netherlands.

Total exports rose for the third consecutive month, up 0.6 percent to CAD 46.5 billion in December despite decreases in 6 of 11 sections. Shipments of energy products rose 6.2 percent to CAD 8.5 billion in December, the fifth consecutive monthly increase and the highest level since November 2014. Following pipeline disruptions in November, exports of crude oil and crude bitumen led the increase, up 7.4 percent to CAD 5.6 billion on higher volumes. Exports of natural gas (+26.6 percent) and electricity (+48.8 percent) also contributed to the gain as unusually low temperatures hit the North-eastern United States in December. Also, sales of metal and non-metallic mineral products soared  7.7 percent to CAD 5.6 billion. Unwrought precious metals and precious metal alloys led the increase on higher shipments of unwrought gold to Hong Kong, the United States and the United Kingdom.

Exports to the United States were down 0.8 percent to CAD 34.9 billion while those to countries other than the United States rose 4.9 percent to  CAD 11.6 billion in December, led by Japan (aircraft), India (potash), the United Kingdom (unwrought gold) and Hong Kong (also unwrought gold).

Year-on-year, exports were up only 0.4% while imports jumped 7.8 percent.

Canada December Trade Gap Larger Than Expected


Statistics Canada | Luisa Carvalho | luisa.carvalho@tradingeconomics.com
2/6/2018 2:15:19 PM