Canada’s merchandise trade deficit incresed and showed weakness in energy exports

The following data is released on Wednesday by statistics Canada, for Canadian merchandise trade data of December.

The trade deficit incresed to $4.6 billion canadian dollar in December, compared with the median forecast of c $2.8 billion by analysts surveyed. The trade situation deteriorated as imports rose and exports dropped.

Overall exports decresed 3.8 percent to c $46.3 billion, the biggest monthly decline since July 2017, due to lower crude oil prices.

Energy exports dropped 21.7%, the biggest drop in a decade, driven by lower crude oil prices. The trade data was delayed because the US government shutdown. Canada Statistics already reported exports reduced 0.1 percent in the final quarteron Friday, which influence by energy. Energy exports fell 0.6% and non-energy exports rose 0.1% according to GDP data.

In December imports incresed 1.6%, while imports rose 1.1%, especially imports of machinery, equipment and other parts which rose 0.8%. While this was a positive sign for Canadian investment activity, imports actually fell 0.9%. Consumer goods incrsed 3.1%, while household spending still the main contributor to growth in the final quarter. Energy imports rose 19.7%, led by refined petroleum products, as recent maintenance and equipment overhauls at some Canadian refineries boosted demand for foreign refined petroleum products.

Caculate by the region, exports to the United States, fell 3.6%, because the driven by lower crude oil exports, the bank of Canada still looking forward to future export-led growth.

During 2018, exports grew 6.5% and imports grew 5.7%. As a result, the trade deficit narrowed to c $21.7 billion from c $24.6 billion in 2017.