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November 20, 2009

Rising exports reduce Canada's trade deficit

Statistics Canada announced that the country's exports rose 3.5% in September, while there was little change in imports. As a result, Canada's trade deficit narrowed to $927 million from $2.0 billion in August.

Exports rose by $1.0 billion to $30.3 billion. Automotive products, industrial goods and materials, and machinery and equipment were the main sources of growth for exports. Energy products mitigated the gains.

Exports have been on a downward trend since July 2008 and reached a low point in May 2009. Since then, exports have increased in three of the past four months.

Imports for September edged down 0.1% to $31.2 billion. However, declines in imports in both August and September did not offset the strong gain in July 2009.

Declines occurred in imports of automotive products, machinery and equipment, energy products and agricultural and fishing products. These were mostly offset by a solid gain in imports of industrial goods and materials. If this sector was excluded, total imports would have declined 2.1%.

Exports to the United States increased 0.5% while imports grew 1.7%. As a result, Canada's trade surplus with the United States shrank to $2.1 billion in September from $2.3 billion in August.

Exports to countries other than the United States increased 12.4% and accounted for 88% of the increase in overall exports while imports declined 3.2%. Higher exports to the European Union were largely responsible for the increase in exports. Consequently, Canada's trade deficit with countries other than the United States narrowed to $3.0 billion in September from $4.3 billion in August.

(Source: Statistics Canada)