Canadian trade deficit narrows to $2.9 billion in February

Wednesday, 17 April 2019 19:27:19 (GMT+3)   |   San Diego
       

Canada's imports declined 1.6 percent in February, while exports were down 1.3 percent on lower exports of non-energy products. As a result, Canada's merchandise trade deficit with the world narrowed slightly, from $3.1 billion in January to $2.9 billion in February.

Following two consecutive monthly increases, total imports declined 1.6 percent to $50.9 billion in February. Imports were down in 8 of 11 product sections, with metal and non-metallic mineral products posting the largest decline. Import prices were down 1.6 percent, while volumes were essentially unchanged.

Notable import decreases were also observed in other product categories in February, including the industrial machinery, equipment and parts (-3.5 percent), consumer goods (-1.9 percent) and motor vehicles and parts (-1.9 percent) sections.

Partially offsetting these decreases were higher imports of aircraft and other transportation equipment and parts, up 6.3 percent to $2.8 billion. After increasing by $680 million in January, imports of aircraft rose by $378 million to a record in February, mostly on higher imports of airliners from the United States. This was moderated by lower imports of ships from Portugal and Norway.

Following a 5.3 percent increase in January, total exports were down 1.3 percent in February to $48.0 billion. All non-energy product sections declined in February, led by the metal and non-metallic mineral products section. Excluding energy products, exports fell 4.0 percent. Overall, export volumes were down 4.1 percent, while prices were up 2.9 percent.

Following a strong increase in January, exports of metal and non-metallic mineral products declined 6.6 percent to $5.2 billion in February. The decrease was largely due to lower exports of refined gold to the United Kingdom, which had increased significantly in January. There were also decreases in gold transfers within the banking sector in February.

Exports of metal ores and non-metallic minerals decreased 11.0 percent in February to $1.7 billion. There were lower exports of potash to the United States, as well as lower exports of iron ores to the Netherlands.

Exports of motor vehicles and parts (-2.8 percent) were also down in February, mainly on lower exports of passenger cars and light trucks. This decrease coincided with a slowdown in auto production in February. Year over year, exports of passenger cars and light trucks were down 8.0 percent.

Exports of energy products partially offset the overall decrease in February, up 11.7 percent to $9.3 billion. Following five months of decline, exports of crude oil (+8.5 percent) rose for a second consecutive month in February, again on the strength of higher prices. Meanwhile, export volumes for crude oil were down 5.3 percent, which coincided with production cuts in Alberta at the beginning of the year. Exports of natural gas (+46.2 percent) also contributed to the increase in February, mostly on higher prices.

Exports to the United States rose 3.5 percent to $36.3 billion in February, primarily on higher exports of crude oil. Imports from the United States were up 1.2 percent to $32.8 billion, in part due to higher imports of aircraft. As a result, Canada's trade surplus with the United States widened from $2.6 billion in January to $3.5 billion in February. Comparing the average exchange rates of January and February, the Canadian dollar gained 0.6 US cents relative to the American dollar.

Exports to countries other than the United States declined 14.0 percent to $11.7 billion in February, the lowest level since February 2018. Widespread decreases were led by lower exports to the United Kingdom (gold), Saudi Arabia (other transportation equipment), Japan (canola and other crop products) and the Netherlands (iron ores, crude oil and coal).

Imports from countries other than the United States also posted a strong decline, down 6.3 percent to $18.1 billion. A number of countries contributed to the decrease, including China (various products), Mexico (autos), Germany (autos) and the United Kingdom (aircraft and parts, energy products). As a result, Canada's trade deficit with countries other than the United States widened from $5.7 billion in January to $6.4 billion in February.


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