Canada Trade Gap Smallest in 6 Months

Canada’s trade deficit narrowed sharply to CAD 0.97 billion in April 2019 from a downwardly revised CAD 2.34 billion in the previous month and compared with market consensus of a CAD 2.8 billion shortfall. It was the smallest trade gap since October last year, as exports increased 1.3 percent mainly due to higher sales of gold while imports fell 1.4 percent mostly on lower purchases of aircraft.

Exports went up 1.3 percent month-over-month to CAD 50.7 billion in April from an upwardly revised CAD 50.05 billion in March. Sales of metal and non-metallic mineral products advanced 15.0 percent to CAD 5.7 billion, boosted by higher purchases of gold within the banking sector. This coincides with a recent increase in global demand for gold. Additionally, sales of farm, fishing and intermediate food products rose 5.1 percent, mainly on higher exports of wheat (+21.7 percent) while canola partially offset the increase (-14.7 percent). On the other hand, sales fell for motor vehicles and parts (-4.6 percent), mostly due to passenger cars and light trucks, as there were atypical shutdowns in April at some Canadian assembly plants, which led to a decrease in imports of engines and parts (-3.9 percent) and light vehicles (-6.6 percent). Despite a modest decrease in exports of energy products (-0.5 percent), there were large fluctuations in some categories within this section. Exports of crude oil increased 11.7 percent to CAD 7.8 billion, offset by a fall in sales of natural gas (-45.3 percent). This follows harsh weather conditions in the US, as well as supply constraints that contributed to a 31.8 percent rise in natural gas prices from January to March.

Exports to the US rose 0.9 percent to CAD 37.8 billion and sales to countries other than the US went up 2.4 percent to CAD 12.9 billion, namely to Hong Kong (gold), China (copper), Norway (nickel) and Indonesia (wheat).

Imports declined 1.4 percent to CAD 51.67 billion in April 2019, from an upwardly revised CAD 52.38 billion in the prior month. Purchases of aircraft and other transportation equipment and parts dropped 23.6 percent to CAD 1.9 billion, after declining 15.6 percent in March, as imports of aircraft continued to decline (-82.7 percent), mostly due to lower deliveries of airliners from the US. In addition, purchases of consumer goods went down 3.0 percent to CAD 10.6 billion, driven by pharmaceutical products (-7.8 percent to CAD1.7 billion), mainly on lower imports from Europe. Meanwhile, purchases of energy products advanced 10.7 percent to CAD 3.5 billion, the third consecutive monthly increase, boosted by refined petroleum products (+13.9 percent) partially due to increased imports of motor gasoline from the Netherlands and  crude oil (+7.9 percent).

Imports from the US increased 1.9 percent to CAD 33.6 billion, while those from countries other than the US dropped 7.0 percent to CAD 18.1 billion, as China (various products) and Saudi Arabia (crude oil) contributed the most to the widespread decrease.

Canada Trade Gap Smallest in 6 Months

Statistics Canada | Stefanie Moya |
6/6/2019 12:59:19 PM