Canada Trade Deficit Narrows in January


Canada's merchandise trade deficit narrowed to CAD 1.9 billion in January of 2018 from a CAD 3.1 billion in December. Imports decreased 4.3 percent month-over-month on lower purchases of industrial machinery, equipment and parts. Exports fell 2.1 percent, mostly due to lower sales of passenger cars and light trucks.

Total imports declined 4.3 percent month-over-month in January of 2018 to CAD 47.7 billion, after reaching a record high in the previous month. Imports of industrial machinery, equipment and parts dropped 11.3 percent to CAD 4.5 billion. Purchases of logging, mining and construction machinery, which reached a record high in December, fell 40 percent as new regulations on off-road diesel engine and machine emissions came into effect on January 1, 2018. Additionally, imports of consumer goods decreased 4.6 percent to CAD 10 billion and clothing, footwear and accessories declined 18.0 percent. Also, lower purchases were seen for: electronic and electrical equipment and parts (-6.3 percent); communications and audio and video equipment (-10.3 percent), mainly due to lower imports of cell phones from China and following high import levels of cell phones in November and December. Year over year, imports increased 2.0 percent. 


Imports from the United States went down 1.8 percent to CAD 30.9 billion, mainly due to lower purchases of logging, mining and construction machinery and equipment. Following a record high in December, imports from countries other than the United States dropped 8.5 percent to CAD 16.8 billion, mostly attributable to lower imports of cell phones from China and refined petroleum products from the Netherlands. 

After three consecutive monthly increases, exports fell 2.1 percent to CAD 45.8 billion. Sales of motor vehicles and parts declined 5.7 percent to CAD 7.2 billion on lower exports of passenger cars and light trucks (-13.1 percent). Atypical plant closures for this time of year were responsible for the decrease in January, which also led to a drop in sales of motor vehicle engines and parts (-7.6 percent). In addition, exports of forestry products and building and packaging materials went down 6.6 percent to CAD 3.4 billion, mostly due to lumber and other sawmill and millwork products (-14.5 percent), as the US Department of Commerce resumed collecting import duties on Canadian lumber in late December 2017. Exports excluding energy products dropped 3.2 percent. On the other hand, sales of energy products increased 2.9 percent for the sixth consecutive month and entirely due to higher prices. Year over year, exports decreased 1.5 percent. 

Shipments to the United States fell 2.9 percent to CAD 34.1 billion, due to lower exports of passenger cars and light trucks and aircraft. Exports to countries other than the United States rose 0.4 percent to CAD 11.8 billion. Sales advanced to the United Kingdom, namely unwrought gold while exports decreased to Spain, China and Turkey.

Canada Trade Deficit Narrows in January


Statistics Canada | Stefanie Moya | stefanie.moya@tradingeconomics.com
3/7/2018 3:58:56 PM