Canadian international merchandise trade

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Canada's merchandise trade surplus with the world expanded by about $1 billion in January, as exports increased at their fastest pace in more than a year.

Canadian companies exported $38.0 billion worth of merchandise, a 3.6% increase from December. Exports were on a downward trend through most of 2007. In terms of constant dollars, a method used to isolate volume changes, export prices rose 4.2%, while volumes edged down 0.6% in January.

At the same time, the value of merchandise imports rose 1.0% to $34.7 billion, the third increase in a row. Prices increased 1.7%, while volumes slipped 0.7%.

As a result, the trade surplus with the world rebounded from a revised $2.3 billion in December, the lowest since November 1998, to $3.3 billion.

The trade surplus with the United States recovered some of its December decline, reaching $6.2 billion, as exports to the United States grew more sharply than imports.

At the same time, the deficit with countries other than the United States narrowed to $2.9 billion, primarily because exports to "all other countries" rose significantly. China, India and Russia were among the important trading partners in this country grouping.

Exports bounce back on gains in energy, industrial goods and materials

Exports partially recovered from December's decline, as gains in the majority of sectors outweighed declines in automotive products, machinery and equipment and other consumer goods.

Energy products gained ground for the third straight month, surging 11.9% to $9.2 billion on the strength of record high crude petroleum exports. An 11.5% gain in crude petroleum was due mostly to an increase in prices, which outweighed an increase in volume. Natural gas exports soared 13.6% to $2.5 billion, the second consecutive increase, as prices experienced a recent resurgence.

Exports of industrial goods and materials rebounded in January, jumping 10.7% to $8.7 billion. While gains were widespread across the sector, precious metals exports, which reached a record, accounted for nearly half the gain. Exports of gold were the driving force behind the increase as prices rose. Robust demand from India and Brazil boosted exports of fertilizers, while increased exports of uranium pushed up inorganic chemicals. Together, these goods drove exports of chemicals, plastics and fertilizers up 2.9% to $2.8 billion.

Agricultural and fishing products rose 7.7% to a record $3.0 billion, the result of widespread increases within the sector. Other agricultural and fishing products rose 7.9% to $2.6 billion, as exports of canola, which have nearly tripled since October, reached a record high. Canola's popularity continued to expand, partly due to China's increased demand for canola oil.

Exports of forestry products increased 1.1% to $2.1 billion, halting nine months of decline. Wood pulp and other wood products exports rose 8.0%, while newsprint and other paper and paperboard gained 3.9%. These gains outweighed a decline in exports of lumber and sawmill products.

Exports of machinery and equipment dropped for the second month in a row, slipping 1.3% to $7.5 billion, their lowest level since December 2004. This sector has been trending downward since August 2007. Industrial machinery led the decline as exports retreated 11.4% from December's record $2.0 billion. Offsetting the decline, television, telecommunications and related equipment surged 26.9%, the first increase since July 2007.

Automotive products struggled for a second straight month, falling 9.9% to $5.0 billion, as a result of continued widespread temporary plant shutdowns and production cutbacks. Exports of trucks and other motor vehicles plummeted 29.3% to their lowest level dating back to June 1991. Meanwhile, passenger autos declined 9.2% to $2.5 billion, the third drop in a row. Motor vehicle parts were also weak, sliding 1.3% to $1.8 billion.

Energy products fuel imports

The majority of import sectors recorded gains in January, fuelled by a surge in energy products, particularly crude petroleum.

Energy products climbed 9.8% to $3.9 billion, surpassing December's record high. Other energy products increased dramatically, as coal and other related products soared 26.7%, the second significant increase in a row. Crude petroleum rose for the third month in a row, gaining 6.7% to reach $2.3 billion, as imports from countries such as Algeria and Norway flowed into Canadian refineries.

Automotive products advanced 1.5% to $6.1 billion, on the strength of motor vehicle parts and passenger autos, yet remained well below the peak level of $7.2 billion set in July 2006. Motor vehicle parts increased 3.5% to $2.5 billion, ending three months of declines, while passenger autos rose 2.2%, remaining relatively flat since September 2007. Meanwhile, trucks and other motor vehicles fell 3.3% to $1.3 billion, its lowest level since September 2006.

Agricultural and fishing products gained 1.9% to a record $2.2 billion, on the strength of cocoa, coffee and other preparations, and record imports of fodder and feed. Combined, they accounted for more than three-quarters of the increase. Record levels of fresh fruits and berries boosted imports of fruits and vegetables.

Industrial goods and materials fell 1.9% to $6.9 billion, despite record imports of metals and metal ores which have been on an upward trend since August. Precious metals and alloys rose for the third month in a row, as gold prices escalated. Chemicals and plastics dropped 11.8% to $2.2 billion, its lowest level since November 2004, due to a sharp decline in organic chemicals, in particular, active agents used in the production of medications. Chemicals and plastics have been moving downward since peaking in July 2007.

Machinery and equipment geared down 0.8% to $9.5 billion. Other communications and related equipment led the decline, dropping 6.1% to $1.4 billion. Aircraft and other transportation equipment edged down 0.5% as imports of aircraft, engines and parts declined for the third consecutive month. Imports of aircraft and other transportation equipment have levelled off since peaking in July. Imports of industrial and agricultural machinery inched up 0.3% following a strong showing throughout 2006 and 2007. Leading the way in January were imports of excavating machinery which jumped 9.8%.

Available on CANSIM: tables 228-0001 to 228-0003, 228-0033, 228-0034, 228-0041 to 228-0043 and 228-0047 to 228-0055.

Definitions, data sources and methods: survey numbers, including related surveys, 2201, 2202 and 2203.

The publications Exports by Country (65-003), Exports by Commodity (65-004), Imports by Country (65-006) and Imports by Commodity (65-007) were terminated with the final issues published in February 2008. To obtain data in alternate formats, contact the Marketing and Client Services Section (trade@statcan.gc.ca).

The January 2008 issue of Canadian International Merchandise Trade, Vol. 62, no. 1 (65-001-XIB, free) is now available from the Publications module of our website. 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-XWE, free).

For more information on products and services, contact Sharon Nevins (toll-free 1-800-294-5583; 613-951-9798). To enquire about the concepts, methods or data quality of this release, contact Deborah Sussman (613-951-0284), International Trade Division.

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