After a collapse in energy prices crimped Canadian exports to start 2016, their recovery resulted in December export growth of 0.8%. This resulted in Canada recording its second consecutive monthly trade surplus with the world and was the third consecutive monthly increase in exports.

However, almost all of the growth in December was the result of stronger energy price as energy exports increased by 15.9% for the month with a 16.5% increase in prices being offset by a slight decline in export volumes. Global oil prices continued their recovery from the lows recorded at the start of 2016 as global demand recovered and an agreement to diminish production between OPEC and non-OPEC countries was announced in December. 

On an industry basis, 7 of 11 sub-sectors experienced declines in December with metal ores and non-metallic minerals exports falling by 12.6% and motor vehicles and parts by 5.6%. Despite the number of sectors suffering smaller drops, the weakness did not signal a retraction from the strong and broad-based growth from November which is now entrenched in the numbers.

While overall Canadian exports declined by 0.7% in 2016, growth recovered in the second half of the year. The double digit declines in energy and metal ores and non-metallic minerals for the year reflected weak global commodity prices which bottomed out in the early part of the year. The recovery in their prices, coupled with the strong growth from motor vehicles and parts and consumer goods as US demand continues to grow provide strong momentum for Canadian exports heading into 2017.

The full report is available on the EDC website.