Canada's merchandise imports declined 5.8% to $37.3 billion in August, the first decrease since March 2008, due to lower imports of energy and automotive products. The decline in imports was the largest percentage drop since December 1991. Total import volumes fell 6.9%, while prices increased 1.1%.
At the same time, exports fell 1.6% to $43.1 billion, marking the first decline since December 2007. Export volumes were down 1.5%, while export prices remained relatively unchanged.
Merchandise trade with the United States declined on both fronts. Exports fell 3.9% to $32.5 billion, primarily due to energy products, while imports decreased 5.8% to $23.9 billion. Overall, the trade surplus with the United States expanded to $8.6 billion from $8.4 billion in July.
Exports to countries other than the United States increased 6.0%, while imports from these countries as a group declined 5.9%. Consequently, Canada's trade deficit with countries other than the United States narrowed to $2.8 billion in August from $4.2 billion in July.
Following two consecutive monthly increases, energy products dropped 24.9% to $4.3 billion in August. Declining volumes were the leading cause, falling 26.1%, as prices increased 1.6%.
Lower imports of crude petroleum led the fall as volumes declined 34.2%. Crude petroleum export prices declined for the first time since October 2007. Coal and other related products also contributed to the fall, as volumes decreased by more than the growth in prices.
Imports of automotive products decreased 14.2% to $6.0 billion, primarily a result of reduced imports of trucks and passenger autos as sales have declined in recent months.
Exports of energy products fell for a second consecutive month, declining 9.7% to $11.3 billion in August, as a result of decreasing volumes (-3.2%) and prices (-6.6%). Reduced exports of petroleum and coal products, in particular diesel fuel to the United States and the Netherlands, led the decline. Lower natural gas and crude petroleum exports also contributed to the decrease. Rising exports of coal to Taiwan and Japan partly offset these declines.
In contrast, the largest offsetting movements were observed in industrial goods and materials, and in agriculture and fishing products. Industrial goods and materials rose 2.8%, due to a combination of rising prices and volumes. Prices have been on the rise in this sector throughout 2008. Meanwhile, exports of agricultural and fishing products increased 4.5%, as the increase in price outweighed the rise in volume. Increased exports of canola to Japan and China contributed to the rise. Exports of canola rose 52.5%, the largest monthly increase since January 2008.