Canada Trade Deficit Expended


Canada's trade balance with the world fell to $1.3 billion in November from a revised $2.3 billion in October.

Exports slid for the fourth month in a row, dropping 6.8% to $39.2 billion, the result of falling prices and lower volumes. It was the lowest total for exports since January 2008. The volume of exports decreased 1.8%.

Similarly, a combination of price and volume reductions pushed Canada's imports down 4.8% to $38.0 billion. The volume of imports fell 2.3%.

Excluding energy products, exports declined 2.7% while imports increased 0.6% in November. The trade balance has been in deficit since July 2007. In November, the trade deficit expanded to $3.5 billion from $2.4 billion in October. In terms of volume, exports and imports decreased 1.2% and 0.9% respectively.

Exports to the United States fell 7.4% to $28.9 billion, largely the result of a decline in energy products. The decrease in exports outpaced a 3.7% drop in imports, putting Canada's trade surplus with the United States at $4.5 billion, its lowest level since May 1999.

Imports from countries other than the United States declined 6.6%, the result of falling imports of crude petroleum, while exports decreased 5.0%. As a result, Canada's trade deficit with this group of countries narrowed for the second consecutive month to $3.2 billion.

Energy products led the overall decline in exports for November, dropping 19.4% to $8.4 billion, the fifth consecutive monthly decrease in this sector. The decrease mostly reflected a 15.0% decline in prices, while volumes were down 5.1%.

While the decline in energy products was widespread, decreasing exports of crude petroleum (-22.8%) was the main contributor. Declining exports of fuels and natural gas were also factors.

Exports of industrial goods and materials declined 7.4% to $9.1 billion as both prices and volumes fell. November marked the third price decline in the past 12 months, while volumes have fallen nine times during the same period. Exports of industrial goods and materials have declined for four consecutive months.

Decreased demand in the United States led to a decline in exports of copper and alloys, which fell for the fourth consecutive month. Growth in exports of fertilizer partially offset the sector's decline.

Exports of machinery and equipment rose 1.4% to $8.3 billion, continuing a rising trend that began in July 2008. While price increases have been mainly responsible for this trend, November's rise was a combination of price and volume. The main factor was exports of aircraft and other transportation equipment, which grew 11.9% as a result of gains in helicopter exports. Also aiding the increase were exports of televisions, telecommunications and related equipment to the United States, particularly cell phones.
Large drop in energy products drives imports down

November's total decline in imports was largely the result of energy products, which fell by over a third to $3.6 billion. The main contributor to this decrease was crude petroleum, where volumes fell 34.9%, in part due to refinery maintenance, while prices fell 19.6%. Aviation and motor vehicle fuel also contributed to the fall in energy products.

Automotive products imports continued to decline, falling 4.5% to $5.8 billion in November. Volumes declined for the second month in a row, while import prices continued their six-month upward trend. This sector has been trending downward since early 2007. Declines in imports of passenger autos and trucks contributed to the decrease, reflecting weakened sales across Canada.

Imports of machinery and equipment gained 2.7% to $11.2 billion, their third consecutive increase, as both prices and volumes rose. The sector has been trending upwards since December 2007. Contributing in part to the rise was imports of telecommunications equipment to be used for network infrastructure, as well as wind-powered generators for a renewable e...


TradingEconomics.com, Statistics Canada
1/13/2009 6:01:13 AM