Canada's exports and imports down

Canada's merchandise exports and imports both fell in August, after gains in July.

Exports declined 5.1%, as a result of a 5.0% reduction in volumes. Imports decreased 2.8% as import volumes edged down 0.3%. Consequently, Canada's trade deficit widened to $2.0 billion in August from $1.3 billion in July.

After two consecutive months of increases, exports fell to $29.2 billion in August from $30.8 billion in July. Exports declined in all sectors, led by machinery and equipment, agricultural and fishing products, industrial goods and materials, and automotive products.

Following a 9.4% gain to $32.1 billion in July, imports declined to $31.2 billion in August. This decrease was the result of a 2.6% reduction in prices. Machinery and equipment accounted for half of the decrease in imports. Energy products, other consumer goods and industrial goods and materials also contributed to the decrease. Gains in imports of automotive products moderated the decline.

Since reaching record highs in July 2008, exports and imports have generally been trending downward. Since July 2008, export volumes have fallen by 21.3% and prices have declined by 16.3%. In comparison, import volumes have fallen by 18.1% while prices have decreased by 3.5%. However, since April 2009, import volumes have generally been on the rise while import prices have fallen rapidly. During the same period, the decline in export volumes and prices has slowed down.

Exports to the United States fell 3.2% while imports declined 3.3% in August. As a result, Canada posted a trade surplus with the United States of $2.2 billion, basically unchanged from July.

Exports to countries other than the United States decreased 10.6%. Imports declined 2.0%, mostly as a result of lower imports from the European Union. Consequently, Canada's trade deficit with countries other than the United States increased to $4.2 billion in August from $3.5 billion in July.

Lower volumes account for declining exports

Exports of machinery and equipment fell 10.4% to $6.2 billion, erasing the gains posted in July. The decline reflected a 10.7% contraction in volumes. Although the declines in the sector were widespread, exports of aircraft and telecommunication equipment led the decrease.

Exports of agricultural and fishing products fell 10.3% to $2.8 billion, largely the result of a 7.9% decline in volumes. Lower exports of canola, wheat and vegetable products accounted for most of the drop.

Exports of industrial goods and materials decreased 3.3% to $6.2 billion, as volumes fell 6.5%. The main contributing factor in this sector was declining exports of crude non-metallic minerals. Exports of metal ores, with the exception of copper ores, were also down in August.

Exports of automotive products declined 5.5% to $3.5 billion. Exports of trucks and other motor vehicles were down 35.1%, reflecting truck manufacturing plant closures. Since August 2008, exports of trucks and other motor vehicles have fallen 75.8%. Exports of motor vehicle parts and passenger autos also declined in August.

Half the decline in imports is attributed to machinery and equipment
Imports of machinery and equipment declined 4.9% to $9.0 billion, after strong gains in July. The decline was mostly due to a 3.8% reduction in prices. The decreases were widespread, with aircraft and other transportation equipment accounting for half of the decline.

After four months of growth, imports of energy products declined 9.8% to $2.9 billion. Imports of crude petroleum fell 12.0%, due to volume reductions. Petroleum and coal products also decreased, mainly the result of lower imports of motor gasoline.

Imports of other consumer goods decreased 4.9% to $4.6 billion. While the declines were widespread, reduced imports of medicinal and pharmaceutical products, and outdoor clothing were mostly responsible for the decrease.

Imports of industrial goods and materials contracted 3.4% to $5.8 billion, largely due to a decrease in imports of chemical products. Higher imports of precious metals partly offset the decline in this sector.

Imports of automotive products rose 3.8% to $5.0 billion, due to volumes rising 4.9%. Truck and other motor vehicle imports increased 26.1%, in an effort to replenish inventories and compensate for vehicles no longer produced in Canada.

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