Canada Trade Gap Narrows in October


Canada's trade deficit decreased to CAD 1.47 billion in October of 2017 from an upwardly revised CAD 3.36 billion shortfall in the prior month and better than market expectations of a CAD 2.70 billion deficit. Exports were up 2.7 percent on higher sales to the United States, while imports decreased 1.6 percent due to lower purchases of motor vehicles and parts.

Total exports increased 2.7 percent to CAD 44.5 billion in October, following four consecutive monthly declines. Advances were observed in 9 of 11 sections, led by basic and industrial chemical, plastic and rubber products (12.4 percent). There were also notable gains in metal and non-metallic mineral products (4.5 percent); farm, fishing and intermediate food products (7.7 percent); and energy products (2.7 percent). The increases within the basic and industrial chemical, plastic and rubber products, as well as the energy products sections were driven by similar factors in October. Exports of lubricants and other petroleum refinery products (gasoline blending stock), up 44.5 percent, and refined petroleum energy products (diesel and fuel oils), up 18.4 percent, rose for a second consecutive month, mostly on higher US demand. A recent drawdown in inventories of refined petroleum products in the United States (especially on the East Coast) led to increased exports from Canadian refineries.

Exports to the United States rose 4.1 percent to CAD 33.3 billion in October, led by unwrought gold. Exports to countries other than the United States were down 1.4 percent to CAD 11.1 billion on lower exports to the United Kingdom and China (both unwrought gold). Partially offsetting these declines were higher exports to the Netherlands (metallurgical coal) and Switzerland (aircraft).

Total imports were down 1.6 percent to CAD 45.9 billion in October, mainly due to a decrease in motor vehicles and parts (-8.1 percent). Passenger cars and light trucks were down 8.8 percent in October, returning to June levels after three consecutive monthly increases. Also contributing to the decrease were lower imports of motor vehicle engines and motor vehicle parts, down 11.1 percent. Work stoppages and planned shutdowns in the automotive industry led to a sharp decrease in the demand for automotive components in October. Metal ores and non-metallic minerals were also down 20.1 percent to CAD 983 million, with other metal ores and concentrates (-21.8 percent) contributing the most to the decline. After peaking in September, imports of zinc ores from Alaska decreased in October. 

Imports from the United States were down 0.6 percent to  CAD 29.8 billion, partly on lower imports of zinc ores. As a result, Canada's trade surplus with the United States widened from CAD 2.0 billion in September to CAD 3.5 billion in October. Imports from countries other than the United States fell 3.3 percent to CAD 16.1 billion, on lower imports from Mexico (light trucks), Japan (gold bullion) and Saudi Arabia (crude oil).

Year-on-year, exports were up 0.8 percent and imports rose 0.9 percent.

 Canada Trade Gap Narrows in October


Statistics Canada | Luisa Carvalho | luisa.carvalho@tradingeconomics.com
12/5/2017 3:23:07 PM