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Friday, February 13, 2004 Canadian international merchandise tradeDecember 2003Merchandise exporters finished 2003 on a positive note, reporting a 3.6% gain in their shipments abroad for December, despite a Canadian dollar that hit decade-high levels. Total imports edged up 0.7%, their second consecutive monthly rise. As a result, Canada's merchandise trade surplus soared by nearly $1 billion to $5.4 billion, the largest increase since January 2003. Canadian companies exported $33.4 billion in goods in December, led by strong automotive exports, which accounted for nearly one-half of the total gain in foreign-bound goods. Total imports reached $28.0 billion on strong energy imports. Except for a decline in trade with the European Union, export and import values increased with every major trading region.
The United States purchased $27.1 billion worth of Canadian merchandise in December, up 2.1% from November. In turn, Canada imported $19.5 billion from south of the border, up 0.6%. Canada's trade surplus with the United States increased nearly half a billion dollars to $7.6 billion, while Canada's non-US trade deficit was reduced by over half a billion dollars to $2.1 billion. Compared with December 2002, export prices declined 9%, while import prices dropped over 11%. The decline in merchandise trade values during 2003 are, to a large extent, explained by these price movements. However, in terms of volumes, exports showed real growth of 6% and imports, 3.5%. This means that Canadians traded a larger volume of goods, despite the decline in values. Exports boosted by automotive riseExports of automotive products soared 8.0% to $7.5 billion in December, their second largest percentage gain of 2003. It was surpassed only by an 11% rebound in September following the mid-August power blackout. December's gain occurred as the result of production resuming on several assembly lines that had been shut down for extended periods during the fall. Usually, assembly lines are closed only for the Christmas season. Exports of trucks pushed ahead 9.3%, showing the most improvement, as increases in passenger auto and motor vehicle part merely reversed previous declines. Exports rose in all other sectors except forestry products, which declined 2.3%. The drop was due mainly to lower volumes of lumber and sawmill products, which include other wood fabricated materials, whose prices cooled off from their mid-2003 surge. Higher exports of metal ores - nickel, copper and zinc, in particular - helped push up exports in the industrial goods and materials sector by 6.8% to just under $6.0 billion. Exporters enjoyed high prices for these products, despite the strong Canadian dollar. Exports of machinery and equipment ended back-to-back monthly declines, with a 3.0% increase to $7.2 billion. Most products in this sector showed modest turnarounds, led by aircraft, engines and parts and other equipment and tools. Natural gas exports hit $2.1 billion in December, up 19.1% from November, enough to offset declines in most other energy commodities. As a result, total energy exports rose 1.2% to $4.7 billion. Prices for natural gas crept up during the month, as inventories and demand adjusted to the winter season. Crude petroleum exports fell 11.0% to $1.6 billion, despite a reported increase in overall demand. This drop was entirely volume-related, as prices remained strong. Mad cow disease surfaced in the United States in late December, having the potential to exasperate Canada and US trade in beef products and live cattle. Though there was a small decline in imports of meat and meat preparations for the month, the impact has yet to emerge in monthly trade statistics. Substantial jump in natural gas importsImports increased in most major sectors in December, but the most significant jump occurred in energy products, primarily natural gas. Energy imports rose 7.0% to more than $1.7 billion, largely the result of higher imports of natural gas, destined mainly for the southeastern Ontario market. Natural gas imports into this region are not uncommon, as occasionally Ontario will supplement supplies to its southeastern corridor with imports from the United States. Nevertheless, Canada is still a net exporter of natural gas. December's purchases represented only a fraction of the $2.1 billion that Canada exported during the month. Imports of automotive products rose 1.0% to $6.2 billion, recouping most of a 1.1% decline in November. Passenger auto imports increased 3.9%, enough to offset a drop in truck and other motor vehicle imports. Machinery and equipment imports posted back-to-back monthly gains for only the second time in 2003. In December, they rose 1.1% to more than $8 billion. This is the largest import sector and it accounts for almost 30% of all imports. Imports of aircraft, engines and parts continued to rebound, rising 26.2% to over $700 million. Increases in metals and metal ores (including steel rods and bars, metals in ores and other iron and steel products) were responsible for the overall 1.9% increase in imports of industrial goods and materials. The most significant drop in imports occurred in consumer goods, which fell 3.6% to $3.8 billion. Imports of apparel and footwear declined on lower volumes, as most arrive before the peak winter season. Available on CANSIM: tables 226-0001, 226-0002, 227-0001, 227-0002, 228-0001 to 228-0003 and 228-0033 to 228-0040. Definitions, data sources and methods: survey numbers, including related surveys, 2201, 2202 and 2203. The December 2003 issue of Canadian International Merchandise Trade (65-001-XIB, $15/$151) is now available. The publication includes tables by commodity and country on a customs basis. Current account data (which incorporate merchandise trade statistics, service transactions, investment income and transfers) are available quarterly in Canada's Balance of International Payments (67-001-XIB, $32/$100; 67-001-XPB, $41/$133). Merchandise trade data are available in PDF format on the morning of release. Data on Canadian international merchandise trade for January 2004 will be released on March 10. For more information on the publications, contact Jocelyne Elibani, (1-800-294-5583; 613-951-9647). To enquire about the concepts, methods or data quality of this release, contact Matthew MacDonald (613-951-8551), International Trade Division.
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