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March 12, 2010

Drop in imports widens Canada's trade surplus

Statistics Canada reported that the country's merchandise exports grew 0.5% in January, a slower pace than in the previous four months, while imports declined 1.7%. As a result, Canada posted a trade surplus of $799 million in January compared with a surplus of $75 million in December.

Exports increased to $33.0 billion from $32.9 billion in December. Although exports have been increasing for five consecutive months, the pace of growth slowed in January as declines in automotive products and machinery and equipment nearly offset gains in industrial goods and materials, and other consumer goods.

Following two months of increases, imports declined to $32.2 billion from $32.8 billion in December. Machinery and equipment, other consumer goods and energy products led the downward movement in overall imports.

Exports to the United States decreased 0.6% and imports declined 0.5%, largely as a result of lower trade of automotive products, which led the growth in December. As a result, Canada's trade surplus with the United States was $4.1 billion in January, almost unchanged from $4.2 billion in December.

Exports to countries other than the United States grew 3.8%. Exports to member countries of the Organisation for Economic Cooperation and Development and to Japan were the main factors behind the gain. In contrast, imports from countries other than the United States decreased 3.9%, led by falling imports from the European Union. Consequently, Canada's trade deficit with these countries narrowed to $3.3 billion in January from $4.1 billion in December.