Ottawa, November 5, 2019—The Conference Board of Canada’s Senior Economist Doris Chu offers the following insights on the merchandise trade data for September:
“Following a positive performance in August, Canada’s merchandise trade sector retreated in September, as both exports and imports declined. Canada’s trade sector will face an uphill battle over the near term as trade tensions and softer world GDP growth continue to limit its growth prospects.”
- Pulled down by lower exports of gold, crude oil, and canola, Canadian merchandise exports declined by 1.3 per cent in September, erasing most of the gain in August.
- At the same time, merchandise imports contracted by 1.7 per cent. The deterioration in imports were largely owing to lower imports of gold, iron and steel products, and other transportations equipment and parts.
- With imports falling more than exports, Canada's merchandise trade deficit narrowed from $1.2 billion in August to $978 million in September.
- Exports to the United States dropped by 0.6 per cent in September, while imports were down by 0.4 per cent. As a result, Canada’s trade surplus with the United States inched down from $4.9 billion in August to $4.8 million September.
- At the same time, Canada’s trade deficit with countries other than the United States decreased from $6.1 billion in August to $5.7 billion in September. Exports declined by 3.3 per cent largely as a result of lower exports of crude oil and iron ore to the Netherlands, coal and potash to India, nickel to Norway, and canola to Mexico.
- Meanwhile, imports from countries other than the United States decreased by 4.1 per cent due in large part to lower imports of parts for other transportation equipment from Belgium and pharmaceutical products from Switzerland.
- Export volumes declined by 2.1 per cent for the month, while import volumes decreased by 1.6 per cent. With exports falling more than imports, real net exports took a small bite off real GDP growth in September.
- On a quarterly basis, following a robust 3.5 per cent gain in the second quarter, exports volumes declined by 0.5 per cent in the third quarter with lower exports of energy products accounting for much of the drop. Meanwhile, higher imports of motor vehicles and parts helped to drive import volumes up 1.6 per cent in the third quarter.
The outlook for Canada’s trade sector is expected to remain lackluster for the remainder of the year. Disturbances to global supply chains stemming from trade conflicts and slower world GDP growth will undoubtedly continue to limit growth prospects for Canada’s exports and imports in the coming months.