Canada Posts Smallest Trade Deficit in 17 Months


Canada's merchandise trade deficit narrowed to CAD 0.63 billion in June of 2018 from a downwardly revised CAD 2.72 billion in May and below market expectations of a CAD 2.3 billion gap. It was the smallest trade deficit since January last year, as exports rose 4.1 percent to an all-time high driven by sales of energy products and aircraft while imports fell 0.2 percent.

Total exports increased 4.1 percent month-over-month to CAD 50.7 billion in June, its highest on record. Sales rose boosted by energy products (+7.1 percent to CAD 9.9 billion), its fastest since October of 2014, namely crude oil (+6.6 percent) and refined petroleum energy products (+19.2 percent). Also, sales of aircraft and other transportation equipment and parts picked up (18.9 percent to a record CAD 2.5 billion), mostly due to higher shipments of business jets to both the United States and non-US countries. Additionally, exports advanced for those excluding energy products (+3.4 percent); metal ores and non-metallic minerals (+22.9 percent); motor vehicles and parts (+3.7 percent) and industrial machinery, equipment and parts (+6.1 percent).

Exports to the United States went up 2.5 percent to a record CAD 37.1 billion, mainly on higher sales of passenger cars and light trucks. Exports to countries other than the United States increased 8.7 percent to a record CAD 13.6 billion, mostly on higher shipments to Germany (aircraft), India (metal ores, potash), Belgium (nickel) and Mexico (aircraft).

Imports decreased 0.2 percent to CAD 51.3 billion in June. Purchases dropped mainly due to imports of energy products (-15.1 percent to CAD 2.9 billion) and aircraft and other transportation equipment and parts (-17.1 percent to CAD 2.0 billion), namely aircrafts (-47.9 percent). In addition, purchases declined for refined petroleum energy products (-27.4 percent), as a number of Canadian refineries were temporarily shut down in April and May resumed production in June, reducing the demand for foreign motor gasoline and diesel fuel. On the other hand, imports went up for metal ores and non-metallic minerals (+16.2 percent); consumer goods (+1.2 percent) and basic and industrial chemical, plastic and rubber (+2.7percent).

Imports from the United States rose 0.3 percent to CAD32.9 billion. Imports from countries other than the US declined 1.2 percent to CAD 18.4 billion. Lower shipments from China (cellphones, aircraft) and the United Kingdom (motor gasoline) led the decrease.

Canada Posts Smallest Trade Deficit in 17 Months


Statistics Canada | Stefanie Moya | stefanie.moya@tradingeconomics.com
8/3/2018 1:08:51 PM