Foreign Trade Statistics for Canada and the U.S. Head in Opposite Directions

(Reed Construction Data)

Canada’s merchandise trade surplus contracts

According to the latest numbers from Statistics Canada, this nation’s merchandise trade surplus fell to its lowest level since the early 1990s in the latest month, November 2008. The principal reason was a nearly 11% decline in the value of the Canadian dollar versus the U.S. greenback. This caused the price of imports to shoot up while export volumes declined due to the deepening recession south of the border.

The month-to-month change in Canada’s energy product exports in the latest period was -19.4%, but this was alleviated by energy imports being down an even greater 36.5%. Year-to-date automotive product exports were -21.3% in November as the level of U.S. auto sales fell to its lowest since 1983.

In other product areas, Canada has been making gains in foreign sales of gold coins, due to international demand in a time of economic uncertainty, and in wheat, due to a strong harvest. Commodities are priced in U.S. dollars and, therefore, the decline in value of the loonie has helped to support after-currency-conversion sales going to Canadian producers.
It should also be added that for a nation as trade-dependent as Canada, price, volume and currency swings make for a highly dynamic and confusing mix when it comes to analysing the trade picture.

More information and tables here. Summary Canadian statistics and links to the data files are on the Statistics Canada website.