Canada’s goods trade surplus narrowed to C$769 million in July from a revised C$4.2 billion in June, as lower exports of metals and energy coincided with rising imports.
Exports fell 2.3% to C$76.1 billion, their first monthly decline in six months. Imports increased 2.2% to C$75.4 billion, according to Statistics Canada’s release on Thursday, 3 September.
The surplus, the amount by which goods exports exceeded imports, was well below the C$3.57 billion economists had expected in a Reuters poll. Canada nevertheless recorded its fifth consecutive monthly surplus.
Metals and energy weigh on exports
Metal and non-metallic mineral exports dropped 8.5% after rising sharply in June. Energy exports fell 4.4%, with both prices and volumes contributing to lower crude oil sales.
Excluding those two groups, exports increased 0.6%. Aircraft shipments helped offset the decline, while agricultural exports also rose.
After removing price movements, total export volumes fell 1.5%. The headline values are measured in Canadian dollars and adjusted for regular seasonal patterns, so they reflect changes in prices as well as quantities traded.
Imports of motor vehicles and parts rose 11.4% to a record. Statistics Canada said the usual summer shutdowns at North American vehicle plants were less pronounced this year, especially in the US, lifting seasonally adjusted imports.
Sales to other countries rise
Exports to the US fell 6.6%, while imports from Canada’s largest trading partner rose 1.8%. The bilateral goods surplus narrowed to C$5.9 billion from C$10.3 billion.
Exports to other countries increased 7.4% to a record C$25.6 billion. The Netherlands, China and Germany contributed most to the increase.
Reuters reported that the US accounted for 66.35% of Canadian goods exports in July, down from 69.39% in June and 72.64% a year earlier. A falling share can reflect weaker US sales as well as growth elsewhere.
Stuart Bergman, chief economist at Export Development Canada, the country’s official export credit agency, told Reuters that keeping the US share below 70% was encouraging.
“Sheer gravity alone pulls exporters to the U.S. market,” he said, pointing to efforts to expand sales elsewhere, including canola shipments to China and Japan.
The July decline followed the stronger second-quarter performance covered in our earlier report on G20 trade. Those OECD figures measured quarterly growth in current US dollars, so their growth rates are not directly comparable with July’s monthly Canadian-dollar figures.
July’s report also predates the additional US tariffs introduced in August. Their effect on shipments cannot be established from these figures.
