Canada's Trade Deficit Narrows in April


Canada's trade deficit narrowed to a $370 million in April, from a revised $936 million gap in March. Exports rose 1.8% to a record high of $47.7 billion, led by higher exports of passenger cars and light trucks. Imports were up 0.6% to $48.1 billion, also reaching record high on the strength of import prices.

Following a 3.2% increase in March, total exports rose 1.8% to a record high $47.7 billion in April, with advances in 8 of 11 sections. Volumes were up 1.1% and prices increased 0.7%. Motor vehicles and parts, energy products, and forestry products and building packaging materials drove the gain in exports for the month. Exports excluding energy products rose 1.7%. Year over year, total exports increased 14.7%.

Exports of motor vehicles and parts were up 4.4% in April to $8.1 billion. Passenger cars and light trucks led the increase, up 5.4% to $5.6 billion. 

Also contributing to the overall increase were higher exports of energy products, up 2.5% in April to $8.8 billion. Exports of natural gas led the increase, rising 18.5% to $1.1 billion, mostly on higher prices. Other energy products (+13.9%) also increased, mainly on higher exports of coal to the Netherlands. 

Exports of forestry products and building and packaging materials rose 4.7% in April to $3.7 billion. Following a 6.4% increase in March, lumber and other sawmill and millwork products rose 8.0% in April to $1.5 billion. Volumes for this group rose 4.3% and prices were up 3.6%. There were higher exports of softwood lumber to the United States in April. This increase preceded the decision by the US Department of Commerce to impose countervailing duties on imports of Canadian softwood lumber into the US, effective April 28.

Total imports rose 0.6% to a record high $48.1 billion in April, a fifth consecutive monthly increase, with gains in 7 of 11 sections. Prices increased 1.0%, while volumes were down 0.3%. Year over year, total imports were up 7.4%.

Higher imports of consumer goods, electronic and electrical equipment and parts, and basic and industrial chemical, plastic and rubber products were responsible for the increase in April.

Meanwhile, imports of aircraft and other transportation equipment and parts were down 24.6% in April to $1.3 billion. Fewer imports of aircrafts from the United States and ships from the Netherlands and Poland led the decrease.

Imports of energy products (-14.0%) also decreased in April, to $2.3 billion, mainly on lower volumes. Crude oil and crude bitumen were responsible for the decline, down 22.9% to $1.3 billion, mainly on lower imports from Nigeria and Saudi Arabia.

Exports to the United States rose 5.4% to a record high $36.1 billion in April, mostly on passenger cars, natural gas and softwood lumber. Imports from the United States were up 1.1% to $31.1 billion.

As a result, Canada's trade surplus with the United States widened from $3.4 billion in March to $5.0 billion in April, the largest surplus since May 2014. The Canadian dollar fell 0.3 cents US relative to the American dollar in April.

Exports to countries other than the United States declined 7.8% in April to $11.6 billion, partially offsetting the gain in exports to the United States. Lower exports to the United Kingdom (unwrought nickel and gold), China (unwrought gold), Spain (crude oil and iron ores) and Switzerland (unwrought gold) contributed most to the decline.

Imports from countries other than the United States edged down 0.2%, as widespread declines were partially offset by higher imports from Norway (crude oil and energy transmission cables) and Turkey (crude oil).

As a result, Canada's trade deficit with countries other than the United States widened from $4.4 billion in March to $5.3 billion in April.

Anna | anna@tradingeconomics.com
6/2/2017 12:49:16 PM