Canada Trade Gap Widens to Record High in June


Canada's merchandise trade deficit came in at CAD 3.63 billion in June 2016 compared to an upwardly revised CAD 3.50 billion gap in the previous month, missing market consensus. It was the biggest deficit on record, as exports rose 0.6 percent while imports advanced at a faster 0.8 percent.

Total exports were up 0.6 percent to CAD 41.4 billion. Higher exports of energy products and basic and industrial chemical, plastic and rubber products were partially offset by lower exports of metal and non-metallic mineral products. Exports excluding energy products were down 0.4 percent.

Exports of energy products rose 7.2 percent, the fourth consecutive monthly gain. Crude oil and crude bitumen advanced 6.8 percent, as prices were up 9.1%. Also contributing to the increase were higher exports of natural gas, up 20 percent, as prices rose 32.3 percent. Exports of basic and industrial chemical, plastic and rubber products rose 5.2 percent, boosted by higher exports of plastic resins (+9.3 percent), dyes and pigments, and petrochemicals (+26.4 percent), and basic chemicals (+5.5 percent). Moderating these gains, exports of metal and non-metallic mineral products fell 6.9 percent.

Total imports rose 0.8 percent to CAD 45.0 billion, despite losses in 6 of 11 sections. Higher imports of motor vehicles and parts, energy products, and electronic and electrical equipment and parts were partially offset by lower imports of aircraft and other transportation equipment and parts.

Imports of motor vehicles and parts reached a record high in June, up 3.6 percent. The gain was led by passenger cars and light trucks (+6.3 percent), which increased for the seventh consecutive month to reach a record high. Imports of energy products increased 12.7 percent, attributable to higher imports of refined petroleum energy products, up 30.8 percent to $894 million, mainly on higher volumes. Also contributing to the overall gain, imports of electronic and electrical equipment and parts were up 3.1 percent. Partially offsetting these gains, imports of aircraft and other transportation equipment and parts fell 22 percent. This is the second consecutive monthly decline, following a record high in April.

In the second quarter of 2016, exports dropped 4.7 percent from the previous period to CAD 124.0 billion, the largest decline since the second quarter of 2009. Imports decreased 1.4 percent to CAD 134.7 billion. Consequently, Canada's quarterly trade deficit widened to a record CAD 10.7 billion in the second quarter 2016 from CAD 6.4 billion in the first quarter.

Canada Trade Gap Widens to Record High in June


Statistics Canada | Joana Ferreira | joana.ferreira@tradingeconomics.com
8/5/2016 2:07:18 PM