June 19, 2013

November 21, 2012

Canada’s Industrial Structure Revealed in its Foreign Trade Statistics - Part 1

Alex Carrick

Chief Economist, CanaData

Kudos to Statistics Canada. Its monthly report, “Canadian International Merchandise Trade” (Catalogue no. 65-001-X) has been greatly improved.

There is now much more detail on the products that this nation exports and imports. Plus it’s presented in an easier to understand format.

Generic product headings that used to leave one wondering what was included are now explained by means of a thorough listing of sub-items. For example, “non-metallic minerals” is comprised of three primary items: potash; stone, sand, gravel and clay; and diamonds.

Some extra categories have been added. Most informative among these is consumer goods and I’ll have more to say on that subject further along.

Before we get to some interesting new insights on our international transactions, however, let’s cover the broad strokes.

In September, Canadian goods exports increased 1.9% month to month while goods imports stayed flat. As a result, Canada’s overall trade balance with the world declined slightly to -$9.9 billion from -$18.3 billion (both figures annualized).

Canada has been running a trade deficit with the world for the past six months.

We do better when it comes to our trade position with the United States. In September, our trade balance with the U.S. increased slightly from +$39 billion to +$41 billion annualized.

A great deal of useful information is contained in the table accompanying this article.

By far our major export product is energy, $79.4 billion year to date in September. Second place goes to motor vehicles and parts ($51.2 billion), followed by intermediate metal products ($41.0 billion) and consumer goods ($36.8 billion).

Among import items, the largest sub-categories are consumer goods ($69.7 billion year to date), motor vehicles and parts ($62.6 billion) and electronic and electrical equipment ($41.8 billion).

Our largest trade surpluses are in energy (+$45.6 billion) and farm, fishing and intermediate food products (+$10.2 billion).

Our greatest trade shortfalls are in consumer goods (-$32.9 billion) and electronic and electrical equipment (-$24.3 billion). Industrial machinery and equipment (-$14.0 billion) should also be mentioned.

Certain products are traded more intensely with specific countries. For example, our trade in energy products and in motor vehicles is almost entirely with the United States.

But consumer goods trade, while also closely tied to the U.S., also has a substantial emerging world component.

Imports of clothing, footwear and textile products vastly exceed exports. It’s a safe bet that much of the reason has to do with purchases made from China and other Asian producers.

There’s a similar effect in the “electronic and electrical equipment category”, where the value of imports is more than twice that of exports.

It’s also the case that trade in certain products is more intimately tied to certain provinces. An examination of that effect will form the basis of Part Two of this Economy at a Glance.

For more articles by Alex Carrick on the Canadian and U.S. economies, please see his market insights. Mr. Carrick also has an economics blog.

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