Canada: International Merchandise Trade, April 2016

Canada’s exports increased 1.5% to $41.8 billion in April. Export prices were up 1.1% and volumes rose 0.5%. Imports increased 0.9% to $44.7 billion, as volumes were up 0.8% and prices edged up 0.1%. As a result, Canada’s merchandise trade deficit with the world narrowed from $3.2 billion in March to $2.9 billion in April.

Trade deficit with non-US countries narrows

Imports from countries other than the United States fell 3.0% to $15.0 billion. In April, there were lower imports from Germany (-$174 million) and South Korea (-$170 million). Exports to countries other than the United States decreased 0.6% to $10.5 billion. Lower exports to the United Kingdom (-$276 million) and Spain (-$105 million) were mostly offset by higher exports to countries other than Canada’s principal trading partners (+$268 million) and to Mexico (+$105 million). As a result, Canada’s trade deficit with countries other than the United States narrowed from $4.9 billion in March to $4.5 billion in April.

Imports from the United States were up 3.0% to $29.7 billion and exports increased 2.3% to $31.3 billion in April. Consequently, Canada’s trade surplus with the United States narrowed from $1.7 billion in March to $1.6 billion in April.

Exports rise on higher prices for energy products

Following two sharp monthly declines, total exports rose 1.5% to $41.8 billion in April. Higher exports of energy products; industrial machinery, equipment and parts; and metal and non-metallic mineral products were partially offset by lower exports of aircraft and other transportation equipment and parts. Exports excluding energy products increased 0.8%. Year over year, total exports were down 2.3%.

Exports of energy products rose 7.6% to $5.0 billion in April, the second consecutive monthly gain. Prices rose 9.7% and volumes decreased 1.9%. Higher exports of natural gas (+43.2%) led the gain, as below-average seasonal temperatures hit the northeastern United States at the beginning of April. Exports of crude oil and crude bitumen (+3.5%) also increased, as higher prices more than offset lower volumes.

In April, exports of industrial machinery, equipment and parts rose 10.5% to $2.8 billion, the strongest monthly increase since March 2001. There were widespread increases throughout the section, led by commercial and service industry machinery (+33.6%) and other general-purpose machinery and equipment (+10.7%). Overall, volumes were up 10.7% and prices were down 0.2%.

Following a 5.6% decline in March, exports of metal and non-metallic mineral products rebounded 5.7% to $4.8 billion in April. Volumes rose 4.1% and prices were up 1.6%. Exports of unwrought precious metals and precious metal alloys, up 12.9% to $1.9 billion, were the main contributor to the increase in April.

Partially offsetting these gains, exports of aircraft and other transportation equipment and parts decreased 10.0% to $1.9 billion. After increasing 24.5% in March, exports of aircraft fell 24.6% to $707 million in April.

Higher imports driven by aircraft and other transportation equipment and parts

Total imports increased 0.9% to $44.7 billion in April, despite declines in 6 of 11 sections. Higher imports of aircraft and other transportation equipment and parts as well as of energy products led the increase. Partially offsetting these gains were lower imports of industrial machinery, equipment and parts, and electronic and electrical equipment and parts. Year over year, total imports were down 0.9%.

Imports of aircraft and other transportation equipment and parts rose sharply (+52.0%) to a record $2.2 billion in April. Imports of aircraft increased $695 million to a record $986 million. There were also higher imports of ships, locomotives, railway rolling stock, and rapid transit equipment, up $124 million to $198 million.

Imports of energy products rose 5.9% to $1.7 billion in April, the second consecutive monthly increase. Crude oil and crude bitumen imports were up 13.6% to $1.0 billion. For the section as a whole, prices were up 8.6% and volumes were down 2.5%.

Moderating these gains, imports of industrial machinery, equipment and parts fell 5.1% to $4.1 billion in April. This was the fourth consecutive monthly decline and the lowest level since March 2014. Imports of other general-purpose machinery and equipment led the decline, down 11.9% to $1.4 billion. Overall, volumes fell 4.3% and prices were down 0.8%.

There were also lower imports of electronic and electrical equipment and parts, down 3.9% to $5.1 billion on lower volumes. Imports of communications and audio and video equipment declined 9.0% to $1.6 billion.

Real trade increases in April

In real (or volume) terms, exports increased 0.5% in April, led by industrial machinery, equipment and parts. Import volumes also rose, up 0.8%, as higher imports of aircraft and other transportation equipment and parts were partially offset by lower imports of electronic and electrical equipment and parts. Consequently, Canada’s trade surplus in real terms narrowed from $795 million in March to $678 million in April. Year over year, real exports rose 1.5% in April, while imports declined 1.2%.

Revisions to March imports and exports

Revisions reflect initial estimates being updated or replaced with administrative and survey data as they became available, as well as amendments made for late documentation of high-value transactions. Imports in March, originally reported as $44.4 billion in last month’s release, were virtually unchanged with the current month release. Exports, originally reported as $41.0 billion in last month’s release, were revised to $41.2 billion.

StatsCanada

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell