CANADA ECONOMICS: TD on Canada's International Trade Deficit Shrinks on Higher Energy Exports
12:18 PM EST, 02/05/2021 (MT Newswires) -- Canada's international merchandise trade deficit narrowed to $1.7 billion in December, down from $3.6 billion in November. Nominal imports increased 1.5% (m/m), whereas imports fell by 2.3%. The picture was less encouraging after controlling for price effects, TD notes, saying that export volumes were up a more modest 0.5%, whereas import volumes fell 1.5%.
The increase in exports spanned six of the 11 industries, but was predominantly driven by higher energy products (+10.2%). Exports of forestry products and building and packing materials were also strong (+5%), as were aircraft and other transportation equipment (+8.2%).
After a week outturn in the prior month, imports dropped a further 2.3% in December. This decline spanned seven of the 11 industries. Consumer goods imports were the main cause, declining 8% on the month. Weaknesses were seen elsewhere, including in the aircraft and other transportation equipment industry (-17.1%), as well as farm, fishing, and intermediate food products (-6.9%), energy products (-1.6%), electronic products (-1.4%), and industrial machinery and equipment (-1%).
Canada's merchandise trade surplus with the United States widened to $2.8 billion (from $2.2 billion). Its merchandise trade deficit with the rest of the world narrowed to $4.4 billion (from $5.8 billion in November).
Statistics Canada also released its monthly trade in services report for December. Services exports and imports fell 1.9% and 0.8% on the month, respectively.