Tuesday, January 13, 2009

Canada’s Trade Surplus Retreats in November on Exports Decline

(CBC News)

A fourth straight month of declines in exports helped push down Canada’s trade surplus, to $1.3 billion in November from $2.3 billion the previous month, Statistics Canada said Tuesday.

Economists said the November surplus was far below the $3-billion surplus they had been forecasting.

Exports for November dropped by 6.8% to $39.2 billion, due to falling prices and lower volumes. Statistics Canada said it was the lowest total for exports since January 2008. While prices for exports declined, the volume of exports decreased 1.8%. Statistics Canada said a 15% decline in prices for energy exports were the major factor that led to the overall drop in exports. Energy exports were down for a fifth straight month, falling more than 19% in November to $8.4 billion.

Imports for November fell by 4.8% on price and volume reductions, to $38 billion.

Canada’s trade surplus with its top trading partner, the United States, fell to $4.5 billion, the lowest level since May 1999. Exports to the United States were off by more than seven per cent to $28.9 billion, largely the result of a decline in energy products. The decrease in exports outpaced a 3.7% drop in imports.

Imports from countries other than the United States declined by 6.6%, due to falling imports of crude petroleum, while exports decreased five per cent. Canada’s trade deficit with all countries except the United States narrowed for the second consecutive month, to $3.2 billion.

“The drop in import volumes in October and November outpaced the decline in export volumes,” said Royal Bank economist Dawn Desjardins. “We expect that the combination of the financial market crisis and deepening U.S. recession will continue to curtail export demand with import demand likely to weaken with Canada’s economy having slipped into recession late last year.” RBC said it sees the Canadian economy contracting at an annualized pace of 2.5% for the fourth quarter of 2008.

Summary statistics and a link to the data files are on the Statistics Canada website. Export and import price indexes are here.