Slight increase in exports to the U.S. is offset by declines to the rest of the world in January.
OTTAWA—Canada’s trade surplus plunged to $2.1 billion in January as a slight increase in exports to the U.S. was more than offset by declines to the rest of the world, according to Statistics Canada (StatsCan).
The overall surplus, which is mainly due to trade between Canada and the U.S., fell 28 per cent from $2.9 billion in December as merchandise exports declined 2.3 per cent and imports edged down 0.6 per cent.
Lower shipments of precious metals and alloys and aircraft, engines and parts largely contributed to the decline, while higher exports of crude petroleum partially offset the decrease.
Overall, Canadian exports decreased to $41.4 billion in January, as prices fell 2.2 per cent, while imports decreased to $39.3 billion, with industrial goods and materials and energy products contributing the most to the decline.
Exports to the United States—by far Canada’s largest trading partner—edged up 0.3 per cent to $30.6 billion, while imports from the U.S. slipped 0.3 per cent to $24.5 billion.
As a result, Canada’s trade surplus with the U.S. increased to $6.1 billion in January from $5.9 billion in December.
Exports to other countries fell nine per cent to $10.8 billion, while imports decreased 0.9 per cent to $14.8 billion.
The trade deficit with countries other than the U.S. increased to $4 billion from $3 billion in December.
Robert Kavcic, an economist with BMO Capital Markets, said the declines outside the U.S. were “pretty well across the board” but concluded the Canadian trade picture continued to show signs of improvement.
TD economist Francis Fong said goods moving to the European Union, where several countries are on the brink of recession, fell by 13.4 per cent in January, the single largest monthly decline in nearly a year.
“While not a decidedly positive report, it is important to keep in mind that this month’s moderation in exports follows two months of considerable gains. On a trend basis, the export sector has markedly improved,” Fong wrote.
“All said, Canadian exporters will be a contributor to growth, but the high Canadian dollar and soft European demand still represent challenges. For the time being, we continue to look to domestic demand to be Canada’s main driver of growth.”