Thursday, October 12, 2006

Canadian international merchandise trade

The nation's merchandise trade surplus rose in August as exports advanced for the fourth consecutive month and imports fell.

Canadian companies exported merchandise worth $38.7 billion in August, up 0.3% from July, with strong gains in industrial goods and materials and automotive products. On the other hand, imports declined 0.6% to $34.5 billion, following two consecutive monthly increases.

The resulting merchandise trade surplus amounted to $4.2 billion, compared with $3.9 billion in July.

The surplus with the United States, Canada's largest trading partner, moved up from a revised $8.1 billion to $8.2 billion. Both exports and imports declined, but imports fell more than exports.

At the same time, the nation's trade deficit with countries other than the United States narrowed from $4.2 billion in July to $4.0 billion.

Exports: Industrial goods and materials and automotive products lead growth

The largest boost to exports in August came from industrial goods and materials, where exports advanced 2.8% to a record $8.3 billion. This marked the sector's fourth consecutive upward movement. The strength came from record-setting exports of chemicals, plastics and fertilizers, up 6.8%, as well as metal ores, which surged 11.6%.

Note to readers Merchandise trade is one component of the current account of Canada's balance of payments, which also includes trade in services. Balance of payments data are available for the United States, Japan and the United Kingdom. Trade data for all other individual countries are available on a customs basis only. Revisions In general, merchandise trade data are revised on an ongoing basis for each month of the current year. Customs basis data are revised for the previous data year each quarter. 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.

Exports of fertilizers to China, Brazil and Colombia rose significantly in August. Record high nickel prices also played a role in the growth of exports in the month.

The industrial goods and materials sector has been on a steep upward trend since mid-2003. Between June 2003 and August 2006, prices for metals and alloys jumped 60.8% while metal ore prices more than doubled (+106.5%), reflecting significant increases in demand for these goods.

Exports of automotive products increased 2.6% following the decline in July. All three components of the sector supported the advance, although the bulk of the strength came from motor vehicle parts (+4.0%) and passenger autos and chassis (+2.6%).

Exports of agricultural and fishing products grew 3.2% to $2.7 billion, primarily because of a 19.1% surge in wheat exports. Following a 9.4% increase in July, exports of other agricultural and fishing products advanced 1.4%.

On the downside, exports of energy products declined 2.2% to $7.7 billion, partially reversing gains in June and July. Contributing to the decline were crude petroleum, down 8.5% as a result of a 7.9% decrease in prices, and refined petroleum and coal products, down 4.8% while prices rose 2.0%. Exports of natural gas posted their second straight monthly advance, rising 10.2% in August. Exports of electricity, and coal and other bituminous substances also advanced.

Exports of machinery and equipment declined 1.2% after advancing for three straight months. The bulk of the decline in August came from aircraft and other transportation equipment, where exports fell 9.2%, following three consecutive gains. Exports of industrial and agricultural machinery fell 1.0%, while other machinery and equipment grew 2.1%.

Machinery and equipment exports have been on an upward trend since mid-2003.

Exports of forestry products edged down 0.1% as lumber and sawmill products exports fell for the seventh straight month, with a 4.6% decline in August, in the wake of falling housing construction in the United States. However, exports of newsprint and other paper rose 1.8%, while wood pulp and other wood products advanced 8.3%.

Imports: Automotive products offset moderate gains in other sectors

Imports made moderate gains in five of seven major sectors in August, but they were offset by a large decline in automotive products.

Imports of automotive products fell 6.8% to $6.8 billion after advancing for two consecutive months, with a 12.3% surge in July. The bulk of the decrease came from motor vehicle parts (-9.0%). However, declines in passenger autos and chassis (-4.2%) and trucks and other motor vehicles (-5.9%) were also contributing factors. Imports of automotive products have been volatile month over month while the trend has been virtually flat since early 2005.

Imports of other consumer goods, which have been on a long-term upward trend, retreated for the second consecutive month, edging down 0.2% in August. A 3.3% drop in apparel and footwear imports more than offset a small rise in imports of such products as television, radios and phonographs; watches, sporting goods and toys; photographic goods; and other end products.

On the plus side, machinery and equipment imports rose 0.8% to $9.6 billion, their second consecutive monthly increase. Supporting the rise were an 11.7% jump in imports of aircraft and other transportation equipment, and a 1.5% increase in other machinery and equipment. Dampening the growth were declines in industrial and agricultural machinery (-0.8%) and office machines and equipment (-7.4%).

Imports of energy products moved ahead for the third straight month, advancing 1.6%. Supporting the gain were crude petroleum (+1.3%) and coal and other related products (+15.3%). A small decrease in refined petroleum and coal products imports partly offset the gains.

In the industrial goods and materials sector, imports edged up 0.3% solely on the record-setting strength of metals and metal ores, where imports rose 4.2%. The gain mostly reflected strong demand for metals in ores, concentrates and scrap. Reduced purchases of chemicals and plastics, and other industrial goods and materials dampened these gains to a large extent.

Imports of forestry products advanced 4.9%, more than recovering the ground lost in July. Agricultural and fishing products imports advanced marginally, with the bulk of the strength occurring in products such as cocoa, coffee, and other preparations (+7.1%), and meat and meat preparations (+8.1%).

Available on CANSIM: tables 228-0001 to 228-0003 and 228-0033 to 228-0046.

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

The August 2006 issue of Canadian International Merchandise Trade, Vol. 60, no. 8 (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-XIE, free).

Merchandise trade data are available in PDF format on the morning of release.

For more information on products and services, or to enquire about the concepts, methods or data quality of this release, contact Anne Couillard (613-951-6867), International Trade Division.

Merchandise trade
	July 2006r	August 2006	July to August 2006	August 2005 to August 2006	January to August 2005	January to August 2006	January–August 2005 to January–August 2006
	Seasonally adjusted, $ current
	$ millions		% change		$ millions		% change
Principal trading partners
Exports
United States	30,802	30,567	-0.8	-1.7	238,438	243,722	2.2
Japan	826	940	13.8	7.8	6,705	7,031	4.9
European Union	2,654	2,709	2.1	4.5	19,040	21,506	13.0
Other OECD countries1	1,425	1,494	4.8	4.0	9,916	11,055	11.5
All other countries	2,835	2,963	4.5	12.3	19,535	21,378	9.4
Total	38,541	38,672	0.3	0.1	293,635	304,689	3.8
Imports
United States	22,702	22,372	-1.5	3.0	172,255	174,949	1.6
Japan	998	1,065	6.7	16.6	7,437	7,984	7.4
European Union	3,428	3,715	8.4	19.9	25,308	27,830	10.0
Other OECD countries1	2,068	1,895	-8.4	-10.6	16,287	15,632	-4.0
All other countries	5,491	5,421	-1.3	22.0	34,785	40,744	17.1
Total	34,688	34,469	-0.6	6.8	256,072	267,141	4.3
Balance
United States	8,100	8,195	...	...	66,183	68,773	...
Japan	-172	-125	...	...	-732	-953	...
European Union	-774	-1,006	...	...	-6,268	-6,324	...
Other OECD countries1	-643	-401	...	...	-6,371	-4,577	...
All other countries	-2,656	-2,458	...	...	-15,250	-19,366	...
Total	3,853	4,203	...	...	37,563	37,548	...
Principal commodity groupings
Exports
Agricultural and fishing products	2,582	2,665	3.2	1.8	19,740	20,571	4.2
Energy products	7,888	7,718	-2.2	-1.5	52,152	59,782	14.6
Forestry products	2,733	2,729	-0.1	-6.1	24,541	22,772	-7.2
Industrial goods and materials	8,116	8,341	2.8	18.0	56,104	61,064	8.8
Machinery and equipment	8,110	8,015	-1.2	0.3	62,961	63,305	0.5
Automotive products	6,328	6,493	2.6	-13.6	57,035	55,535	-2.6
Other consumer goods	1,530	1,516	-0.9	2.4	11,600	11,652	0.4
Special transactions trade2	737	658	-10.7	-2.2	5,387	5,728	6.3
Other balance of payments adjustments	517	535	3.5	-2.7	4,111	4,282	4.2
Imports
Agricultural and fishing products	1,991	1,996	0.3	9.7	14,560	15,380	5.6
Energy products	3,299	3,353	1.6	14.7	21,457	23,541	9.7
Forestry products	246	258	4.9	5.3	2,129	2,027	-4.8
Industrial goods and materials	7,020	7,038	0.3	10.3	52,050	55,416	6.5
Machinery and equipment	9,545	9,620	0.8	3.9	73,087	75,369	3.1
Automotive products	7,312	6,817	-6.8	2.9	52,078	53,355	2.5
Other consumer goods	4,290	4,283	-0.2	5.9	32,714	34,105	4.3
Special transactions trade2	345	482	39.7	34.3	3,045	3,038	-0.2
Other balance of payments adjustments	639	621	-2.8	-0.8	4,950	4,907	-0.9
... figures not appropriate or not applicable r revised 1. Includes Australia, Canada, Iceland, Mexico, New Zealand, Norway, South Korea, Switzerland and Turkey. 2. These are mainly low valued transactions, value of repairs to equipment, and goods returned to country of origin.

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