Canadian international merchandise trade, July 2024

Summary:

In July, Canada's merchandise imports decreased 1.7%, while exports fell 0.4%. Consequently, Canada's merchandise trade balance with the world moved from a revised deficit of $179 million in June to a surplus of $684 million in July.

Following a record high, imports decrease on lower deliveries of motor vehicles and parts

Following a record $66.1 billion in June, total imports decreased 1.7% in July to $65.0 billion. Declines were observed in 6 of the 11 product sections, with motor vehicles and parts posting the largest decrease. Excluding motor vehicles and parts, imports increased 0.5% in July. In real (or volume) terms, total imports fell 2.0% in July.

Imports of motor vehicles and parts fell 10.8% and contributed the most to the decrease in total imports. Imports of passenger cars and light trucks fell 18.7% in the month, following a record high in June. Imports in this product group rose 26.0% from January to June 2024, recovering from delayed production and deliveries in the United States that affected Canadian imports of passenger cars and light trucks in late 2023 and early 2024. The decline in July reflected in part the end of this recovery period after production disruptions. Other factors, such as software outages affecting North American dealerships, floods in the southern United States, and seasonal shutdowns at auto manufacturing plants in the United States, may also have influenced movement in the month.

Imports of aircraft and other transportation equipment and parts (-17.2%) were also down in July. Following two months of solid growth, imports of aircraft decreased by 43.4% in July to $410 million, a level comparable to the monthly average value so far in 2024. Imports of ships, locomotives, railway rolling stock and rapid transit equipment (-60.9%) also decreased in July. This was mainly the result of lower imports of ships from China and Norway, as well as fewer imports of locomotives and railway rolling stock from the United States.

Higher imports of metal and non-metallic mineral products (+10.1%) partially offset the overall decrease in July. Imports of basic and semi-finished products of non-ferrous metals and non-ferrous metal alloys more than doubled in July, mainly on higher imports of copper from Sweden. Imports of unwrought gold, silver, and platinum group metals, and their alloys—a category largely composed of unwrought gold—also increased (+19.5%), in part because of higher purchases of gold abroad.

Total exports also decrease on lower exports of motor vehicles and parts

Following a strong increase of 4.7% in June, total exports were down 0.4% in July. Overall, 6 of the 11 product sections decreased. Similar to imports, motor vehicles and parts was the largest contributor to the decrease in exports. Excluding motor vehicles and parts, exports increased 0.3% in July. In real (or volume) terms, total exports decreased 1.5% in July.

Exports of motor vehicles and parts declined 5.4% in July, a second consecutive monthly decrease. Exports of passenger cars and light trucks decreased 5.9% in July to $4.4 billion, the lowest level since November 2022. In July 2024, export values for that product grouping had fallen 24.8% compared with the high observed in October 2023, in large part because of a decrease in Canadian auto manufacturing production. Exports of motor vehicle engines and parts (-7.8%) also decreased in July 2024 and reached their lowest level since November 2022. The decline in July 2024 coincided with a slowdown in production in the United States following a ramp-up in recent months, and, as seen with imports of passenger cars and light trucks, other factors may have contributed as well.

Exports of farm, fishing and intermediate food products decreased 3.9% in July. This followed an increase of 5.7% in June. Exports of canola (-25.6%) and wheat (-16.0%) contributed the most to the decrease in July. Canola exports were down 28.6% since the beginning of the year compared with the same period in 2023, in part because of higher canola processing activity in Canada, with canola oil being used as an input for the North American renewable energy industry. Lower prices observed since the beginning of the year also contributed to the downward trend in exports of canola.

Trade surplus with the United States jumps

Exports to the United States increased 1.9% in July, a fourth consecutive monthly increase, while imports from the United States fell 3.3%. As a result, Canada's trade surplus with the United States widened from $9.0 billion in June to $11.3 billion in July, the largest surplus since October 2023.

Trade deficit with countries other than the United States widens on a strong decline in exports

After rising 14.9% in June, exports to countries other than the United States fell 7.8% in July. A large part of the decline was due to lower exports destined to the United Kingdom (unwrought gold). There were also lower exports to India (crude oil, copper ores and coal) and Hong Kong (crude oil).

Meanwhile, imports from countries other than the United States increased 0.9%. Higher imports from Switzerland (various products) and the United Kingdom (motor gasoline) were partially offset by lower imports from China (various products) and South Korea (passenger cars and light trucks).

Canada's trade deficit with countries other than the United States widened from $9.2 billion in June to $10.6 billion in July.

Revisions to June merchandise export and import data

Imports in June, originally reported at $66.0 billion in the previous release, were revised to a record of $66.1 billion in the current reference month's release. Exports in June, originally reported at $66.6 billion in the previous release, were revised to $65.9 billion in the current reference month's release.

Monthly trade in services

In July, monthly service exports were essentially unchanged at $16.8 billion. Meanwhile, imports of services increased 0.6% to $18.4 billion.

When international trade in goods and services are combined, exports were down 0.3% to $82.5 billion in July, while imports decreased 1.2% to $83.4 billion. As a result, Canada's total trade deficit with the world went from $1.6 billion in June to $883 million in July.

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