Quick take

Exports defy supply chain disruptions

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  • Canada’s merchandise exports increased by 6.4 per cent while imports were up 5.3 per cent. As a result, Canada’s merchandise trade surplus widened from $1.4 billion in September to $2.1 billion in October.
  • Exports of motor vehicles and parts made a strong comeback in October, increasing 30.8 per cent compared to the previous month. Exports of energy products continued to trend higher, rising by 9.8 per cent. Crude oil exports (+11.6 per cent) were the most significant contributor.
  • On the import front, motor vehicles and parts imports rose 27.2 per cent in October. Meanwhile, imports of energy products increased by 14.9 per cent. Imports of consumer goods (+4.5 per cent) also went up, thanks to a sharp increase in imports of clothing, footwear and accessories (+15.4 per cent).
  • Exports to the U.S. grew by 6.9 per cent in October, hitting a new record of $42.2 billion. Meanwhile, imports from the U.S. were up 9.1 per cent to $33.9 billion. Since imports from the U.S. grew faster than exports to the U.S., Canada’s trade surplus with the U.S. narrowed from $8.4 billion to $8.3 billion.
  • Trade of services moved in line with trade in goods, with exports recording a 2.2 per cent gain, while imports edged up by 0.4 per cent.

Key Insights:

  • With the fifth consecutive month of surplus under its belt, Canada’s international trade has started off the fourth quarter on solid footing. Still, looking under the hood reveals that not all is well. In October, export growth continued to be volatile and was skewed towards motor vehicles and energy products. The two industries combined accounted for almost 80 per cent of total export growth. This highlights the pandemic-induced challenges still faced by sectors. Exports of equipment and parts of aircraft and other transportation and industrial machinery are a good case in point, where exports declined in October.
  • Despite exports and imports growing in October, dark clouds loom on the horizon. Supply chain disruptions are not going anywhere any time soon. According to our latest Index of Business Confidence, 41 per cent of businesses expect supply chain disruptions to worsen. What’s more, the Omicron variant has added further uncertainty to the trade outlook. It is too soon to say what impact the new variant will have on international trade. Still, any new restrictions could hinder international travel and exacerbate supply problems and goods shortages, slowing down global trade.
Momanyi Mokaya

Momanyi Mokaya

Research Associate

COVID-19: Get all the insights

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