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Canadian international merchandise trade
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Canada's international merchandise imports and exports both increased in current dollars in October. When measured in constant dollars, both declined. The constant dollar measurement isolates the volume movement by removing the price effect.
Canada's international merchandise trade in October 2008 was greatly influenced by a 10.7% decline (based on the noon spot rate monthly average) in the value of the Canadian dollar vis-à-vis the US dollar during the month and by a sharp fall in energy, food and industrial material commodity prices on world markets (a drop of 16.5% according to the Bank of Canada's US dollar index of commodity prices). The exchange rate decline was the largest such decrease in a single month in recorded history.
The immediate effect of the currency depreciation on imports was to increase substantially the price of imported goods from the United States. The effect was slightly moderated by the fall in commodity prices. For exports, given the dominant role of commodities such as petroleum and gas, metals and minerals and grains, which tend to be priced in US dollars, the price increase was much less. Overall, import and export prices rose 8.0% and 4.2% respectively in October.
In current dollars, imports increased 4.1% to $39.7 billion, as they rose in all sectors except automotive products. It was the sixth increase in seven months. In constant dollar terms, imports fell 3.6%.
Note to readersMerchandise trade is one component of the current account of Canada's balance of payments, which also includes trade in services, investment income and transfers. International merchandise trade data by country are available on both a balance of payments and a customs basis for the United States, Japan and the United Kingdom. Trade data for all other individual countries are available on a customs basis only. Balance of payments data are derived from customs data by making adjustments for characteristics such as valuation, coverage, timing and residency. These adjustments are made to conform to the concepts and definitions of the Canadian System of National Accounts. Constant dollars referred to in the text are calculated using the Laspeyres volume formula which is current dollars divided by Paasche indexes. The Chain Fisher real export and import monthly values are now available on CANSIM database under table numbers 228-0056 (monthly) and 228-0057 (quarterly). Revisions In general, merchandise trade data are revised on an ongoing basis for each month of the current year. Current year revisions are reflected in both the customs and balance of payments based data. Revisions to customs based data for the previous year are released on a quarterly basis. Revisions to balance of payments based data for the three previous years are released annually in June. Factors influencing revisions include late receipt of import and export documentation, incorrect information on customs forms, replacement of estimates with actual figures, changes in classification of merchandise based on more current information, and changes to seasonal adjustment factors. Revised data are available in the appropriate CANSIM tables. |
The value of exports in current dollars rose 2.5% to $43.5 billion following two months of decline. All sectors except automotive products contributed to the gain. In constant dollar terms, exports fell 1.6%.
As a result, Canada's international merchandise trade balance with the world narrowed to $3.8 billion from $4.3 billion in September. This marked the second consecutive monthly contraction as imports grew more than exports.
The growth in imports from the United States surpassed the growth in exports by over $900 million in October. Consequently, Canada's trade surplus with the United States continued to narrow for the fourth month in a row, totalling $7.3 billion.
Meanwhile, Canada's trade deficit with countries other than the United States narrowed to $3.5 billion as exports to these countries grew more rapidly than imports, largely due to a rise in petroleum and coal products as well as precious metals to the European Union.
Import prices rise in all sectors except energy
Strong imports of crude petroleum led the gain in imports of energy products, which increased 22.3% to $5.7 billion. Predominately originating from Saudi Arabia, the United Kingdom and Norway, crude petroleum imports rose 25.7% in October as large gains in volumes offset price declines.
Machinery and equipment imports were up 3.2%, the 8th increase in 11 months. The gain was the result of rising prices as volumes fell. Contributing to the expansion were laptop and desktop computers from China, excavating machinery, and transformers for use at hydro plants.
Imports of automotive products dropped 1.7% to $6.1 billion as a result of declining volumes as prices rose. The loss was attributed to a 7.4% drop in imports of passenger autos, which registered their third monthly decline since January. Softening the decline in imports of automotive products, trucks and other motor vehicles gained 4.4%, the fourth increase in five months. Part of the increase in trucks can be attributed to the delayed production of new 2009 models following periods of shutdown at some US truck production plants.
Widespread increases lead to gain in exports
Exports of machinery and equipment increased 5.7% to $8.3 billion as prices rose for the fifth straight month. Industrial machinery exports, on the rise since July, led the gain.
Contributing to the increase were exports of gold coins, which have been in high demand in the United States. The US mint temporarily suspended sales of one of its gold coins in late September as demand had depleted inventories.
Exports of agricultural and fishing products rose 6.1% to $3.6 billion as both prices and volumes increased. Export prices for these products have been on an upward trend since July 2007. Increased exports of wheat to Algeria, Morocco, Italy and the United States contributed to the rise, reflecting a strong harvest.
Canada's exports of automotive products fell 2.4% to $4.9 billion, due to a large decline in volume as prices rose, prolonging the downward trend that began in January 2007. During this period of decline, the monthly value of automotive exports has fallen nearly 37%. Passenger autos continued their contribution to the decline, falling 3.7%. Much of the loss in passenger autos can be attributed to a weak sales market in the United States, which, in October, fell to its lowest level since 1983.
Available on CANSIM: tables 228-0001 to 228-0003, 228-0033, 228-0034, 228-0041 to 228-0043 and 228-0047 to 228-0057.
Definitions, data sources and methods: survey numbers, including related surveys, 2201, 2202 and 2203.
The October 2008 issue of Canadian International Merchandise Trade, Vol. 62, no. 10 (65-001-XWE, free), is now available from the Publications module of our website. The publication includes tables by commodity and country on a customs basis. The publication format has changed from a bilingual format to separate English and French versions to comply with Treasury Board Common Look and Feel's Guidelines. Table numbers have been modified, and a concordance from the old to the new tables is also available.
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, 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 Anne Couillard (613-951-6867), International Trade Division.
