Merchandise Trade Analysis – January 2017

Upward momentum continues into 2017

Canadian exporters picked up where they left off at the end of 2016, with solid growth in foreign sales and a positive trade balance to start the New Year. Total international sales increased by 0.5 per cent in January, building on what had been a record-setting month in December. Exports, which were valued at $46.5 billion in January, have now grown for four months in a row and are up in seven of the last eight.

export growth chart

Meanwhile, imports into Canada were essentially flat, declining by 0.3 per cent to $45.6 billion. As a result, Canada recorded its third consecutive trade surplus in January, as the value of exports exceeded the value of imports by about $807 million.

monthly trade surplus chart

A recent hacking incident that affected Statistics Canada has meant that many of the details surrounding Canada's trade performance in January were not available at the time of writing. Based on the information that IS available, January' export gains - unlike those in December - were driven by higher sales volumes and not by price effects. Overall export volumes were 1.0 per cent higher in January, while prices were, on average, about 0.5 per cent lower.

While December's export gains were largely driven by price effects in the energy sector, the picture was significantly different in January. Energy-related exports were down 1.2 per cent, while shipments of motor vehicles and parts - which had plunged in December - recovered strongly, posting gains of 7.7 per cent.

 

Canadian Trade Summary
  Nov-16 Dec-16 Jan-17
Value ($billions)
Exports 46.1 46.2 46.5
Imports 45.1 45.8 45.6
Trade Balance 1.0 0.4 0.9
       
Percentage change
Export prices 1.5 0.4 -0.5
Export volumes -0.7 3.5 1.0
Import prices 0.9 1.2 -2.7
Import volumes -6.2 -0.3 2.5


Energy notwithstanding, much of the strength in January's export numbers came from resource-based industries. Exports of farm, fishing and intermediate food products rose by 12.8 per cent, while exports of forest products (up 2.3 per cent) and primary metals and minerals (5.9 per cent) were also higher.

Conversely, aside from motor vehicles and parts, exports of most industrial and consumer goods were lower in January. Aerospace exports fell by 9.1 per cent, while exports of consumer goods, as well as electronic and electrical equipment, both dropped by 3.9 per cent.

growth by product chart

In terms of export destinations, deliveries to the United States rose by 2.3 per cent in January, while shipments to Canada's most important trading partners in Asia were all sharply higher. Exports to China rose 14 per cent compared to December, while exports to South Korea (6.7 per cent) Japan (6.6 per cent) were also stronger. Meanwhile, exports to most of Canada's major European trading partners were lower, led by steep declines in sales to France and Germany. There was, however, a dramatic increase in shipments to the Netherlands, offsetting a similar decline the previous month.

growth by destination chart

On the import side, the main story was a spike in energy deliveries into Canada offsetting declines in other industries. Energy-related imports rose by 12.1 per cent in January. Imports of motor vehicles, as well as plastics, rubber and chemical products were also higher. Imports of most other products were down, however, led by fewer purchases of foreign metals and minerals (and associated finished goods), as well as forest products and industrial machinery and equipment.

 

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