Canada’s trade deficit narrows as imports and exports drop

Statistics Canada announced that the country’s August merchandise exports and imports stabilized after two months of strong growth. Imports fell 1.2%, while exports were down 1.0%.

As imports fell faster than exports the merchandise trade deficit with the world narrowed slightly, from $2.5 billion in July to $2.4 billion in August.

Lower imports of aircraft and other transportation equipment and parts (-25.3%) contributed the most to the decline in August. Imports of metal and non-metallic mineral products (-5.7%) also decreased, and after rising for three consecutive months, imports of industrial machinery, equipment and parts fell 4.4%.

After three consecutive months of strong increases, exports of motor vehicles and parts fell 6.8%, to $7.5 billion. Exports of aircraft and other transportation equipment and parts also contributed to the decline (-14.5%). These decreases were partially offset by higher exports of forestry products and building and packaging materials, which rose 7.6% in August.

On a global perspective, Canada’s trade deficit with countries other than the United States widened from $5.0 billion in July to $5.8 billion in August. Imports from those countries stabilized in August (-0.4%). Exports decreased 6.8%, to $11.2 billion, the lowest level observed since November 2017.

Canada’s trade surplus with the United States widened from $2.5 billion in July to $3.3 billion in August. Imports from the United States fell 1.6%, to $30.4 billion and exports to the United States were up 1.0%, to $33.8 billion