In December, Canada's merchandise exports decreased 1.9%, while imports edged up 0.2%. As a result, Canada's merchandise trade balance with the world went from a surplus of $1.1 billion in November to a deficit of $312 million in December, the first monthly trade deficit since July. The December deficit is close to the typical bounds for monthly revisions to imports and exports.
A large proportion of import and export transactions are completed in US dollars and must be converted to Canadian dollars to compile monthly trade statistics. When the Canadian dollar appreciates against the US dollar, monthly trade values expressed in Canadian dollars are lower.
In December, the average value of the Canadian dollar increased 1.5 cents US compared with the average value in November. This represents the largest monthly gain since May 2021. When expressed in US dollars, Canadian exports edged up 0.1% in December 2023, and imports rose 2.3%.
Total exports fell 1.9% in December, a second consecutive monthly decline. Decreases were observed in 7 of the 11 product sections. In real (or volume) terms, total exports fell 0.4% in December.
Total imports edged up 0.2% in December, despite declines in 8 of the 11 product sections. Imports of consumer goods posted the largest gain. Excluding this product section, imports were down 2.0% in December. In real (or volume) terms, total imports rose 1.3%
Exports to the United States were down 3.4% in December, falling for a third consecutive month. Meanwhile, imports from the United States increased 0.7%. As a result, Canada's merchandise trade surplus with the United States narrowed from $11.2 billion in November to $9.2 billion in December.
Exports to countries other than the United States were up 3.3% in December. Gains were observed in exports to Italy (aircraft and pharmaceutical products), Hong Kong (unwrought gold), Norway (nickel) and Australia (aircraft). Imports from countries other than the United States were down 0.6%, due in part to lower imports from the United Kingdom (unwrought gold).
Canada's trade deficit with countries other than the United States narrowed from $10.1 billion in November to $9.5 billion in December.
This is an excerpt from the 07 February 2024 edition of The Daily from Statistics Canada.