Canada’s merchandise trade balance with the world posted a $135 million deficit in March, narrowing from a $1.1 billion deficit in February. Exports rose 3.8% in March to a record high $47.0 billion, due to stronger exports of energy products and consumer goods. Imports were up 1.7% to $47.1 billion, mainly on higher imports of unwrought gold.
Record exports led by higher energy products
Exports rose 3.8% to a record high $47.0 billion in March, with increases in 8 of 11 sections, following a 2.5% decline in February. Volumes were up 2.5% in March and prices increased 1.3%. Energy products, consumer goods, and metal and non-metallic mineral products were responsible for the increase in exports in March. Exports excluding energy products rose 3.1%. Year over year, total exports increased 12.9%.
Exports of energy products were up 7.0% to $8.7 billion in March on higher volumes. Natural gas exports (+31.6%) led the increase, which is attributable to unusually low temperatures in the northeastern United States in March. Additionally, other energy products rose 64.2%, mainly on higher exports of coal to Japan, China and South Korea. This increase coincided with a slowdown in coal production in Australia caused by Cyclone Debbie, which struck the Australian coast in February.
Exports of consumer goods also contributed to the overall increase in March, rising 6.8% to $6.1 billion. Exports of other food products led the increase, up 11.9% to a record high $1.4 billion, on increased exports of yellow peas and red lentils to India. Exports of miscellaneous goods and supplies also contributed to the increase (+21.2%), mainly on higher exports of gold coins.
Metal and non-metallic mineral products were up 7.1% to $5.6 billion in March, following a 7.4% increase in February. Unwrought precious metals and precious metal alloys led the increase (+14.1%) in March, mainly on higher exports of unwrought gold to China. For the section as a whole, prices were up 4.2% and volumes increased 2.8%.
Increase in imports of unwrought gold
Total imports were up for the fourth consecutive month, increasing 1.7% to $47.1 billion in March, with gains in 7 of 11 sections. Prices rose 1.9% while volumes edged down 0.2%. Higher imports of metal and non-metallic mineral products, industrial machinery, equipment and parts, and motor vehicles and parts were the main contributors to the increase. Year over year, imports were up 5.6%.
In March, imports of metal and non-metallic mineral products increased 10.4% to $4.0 billion, returning to December levels. Unwrought precious metals and precious metal alloys contributed most to the gain, rising 61.1% to $856 million. Higher imports of unwrought gold from Japan led the increase. For the section as a whole, volumes were up 5.1% and prices rose 5.0%.
Imports of industrial machinery, equipment and parts increased 4.1% to $4.4 billion in March, the highest level since September 2016. Most commodity groupings in the section posted gains.
Imports of motor vehicles and parts reached a record high $9.3 billion in March, up 1.5%. Motor vehicle engines and motor vehicle parts, as well as passenger cars and light trucks led the increase. Strong truck sales in March, which are expected to continue in April, drove the increase in imports of passenger cars and light trucks.
A record high in exports to non-U.S. countries
In March, exports to countries other than the United States rose 15.3% to a record high $12.6 billion. Higher exports to China (gold and coal), India (legumes) and South Korea (coal and copper) were responsible for the gain in March.
Imports from countries other than the United States were up 1.2% to $16.7 billion in March, on higher imports from Saudi Arabia (crude oil) and the United Kingdom. As a result, the trade deficit with countries other than the United States narrowed from $5.6 billion in February to $4.1 billion in March.
Imports from the United States increased 2.0% to $30.4 billion in March, while exports to the United States edged up 0.1% to $34.4 billion. As a result, Canada’s trade surplus with the United States narrowed from $4.5 billion in February to $4.0 billion in March. The Canadian dollar fell 1.6 cents US relative to the American dollar in March.
Trade reaches a record high in the first quarter
On a quarterly basis, imports rose 2.6% in the first quarter compared with the previous quarter, reaching a record high $139.7 billion. Increases were observed in imports of motor vehicles and parts, energy products, and aircraft and other transportation equipment and parts.
In the first quarter, exports increased 1.7%, also reaching a record high of $138.6 billion primarily on higher exports of energy products.
As a result, Canada’s merchandise trade balance with the world changed from virtually nil in the previous quarter to a deficit of $1.1 billion in the first quarter of 2017.
Real trade balance in surplus in March
In real (or volume) terms, exports were up 2.5% and imports edged down 0.2% in March. Canada’s real trade balance therefore went from a deficit of $324 million in February to a surplus of $765 million in March.
After falling 4.1% in the last quarter of 2016, real imports increased 3.6% in the first quarter of 2017. Given that exports were relatively stable, Canada’s real trade surplus narrowed from $5.6 billion in the previous quarter to $1.2 billion in the first quarter of 2017.
Minor revisions for February
Export and import data for February remained virtually unchanged in the March release.
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
Dean Popplewell
He has a deep understanding of market fundamentals and the impact of global events on capital markets.
He is respected among professional traders for his skilled analysis and career history as global head
of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean
has played an instrumental role in driving awareness of the forex market as an emerging asset class
for retail investors, as well as providing expert counsel to a number of internal teams on how to best
serve clients and industry stakeholders.
Latest posts by Dean Popplewell (see all)
- Euro zone bond yields sink as German manufacturing slows - 24 July 2019
- How Boris Johnson Plans to Deliver Brexit in 100 Days - 24 July 2019
- Weak PMI’s Sink EUR - 24 July 2019