Canada December International Merchandise Trade Report (Text)

The following is the text of Canada's international merchandise trade report for December from Statistics Canada.

Canada's merchandise exports rose 4.5% and imports edged up 0.8%. As a result, Canada's trade surplus rose from $1.2 billion in November to $2.7 billion in December.

Exports and imports

Exports grew to $42.0 billion in December as volumes increased 4.9%. The value of exports increased in all sectors, led by machinery and equipment. Exports have been trending upwards since July 2011.

Imports increased to $39.3 billion as volumes rose 1.2%. The increase in the value of imports was mainly a result of industrial goods and materials as well as automotive products.

Exports to the United States rose 5.3% to $30.2 billion on higher exports of crude petroleum, aircraft and precious metals. Imports increased 2.8% to $24.7 billion. Both exports and imports posted their highest levels since October 2008. Canada's trade surplus with the United States grew from $4.7 billion in November to $5.5 billion in December.

Exports to countries other than the United States increased 2.5% to a record high of $11.8 billion. Imports from countries other than the United States declined 2.6% to $14.7 billion, a result of lower imports from the European Union. Consequently, Canada's trade deficit with countries other than the United States narrowed from $3.5 billion in November to $2.9 billion in December, the smallest deficit since December 2010.

Increased exports in all sectors

Exports of machinery and equipment grew 9.2% to $7.5 billion in December as volumes rose 9.8%. This was the highest level of exports since March 2009. Exports of aircraft, engines and parts, up 25.5% to $1.3 billion, led the gain. Also contributing to the sector's increase were higher exports of other end products, mainly gold coins.

Exports of industrial goods and materials increased 3.8% to $10.5 billion in December. The gain was a result of higher volumes. Precious metals and alloys, other fabricated materials, as well as iron ores, concentrates and scrap led the gain in export values.

Exports of automotive products rose 6.7% to $5.8 billion in December, the highest level since November 2007. Passenger autos and chassis led the overall increase, posting a fourth consecutive monthly gain as a result of higher volumes.

Exports of energy products increased 1.7% to $10.3 billion, as prices rose while volumes fell. Crude petroleum reached a record high of $6.9 billion. A decline in exports of natural gas partially offset the overall gains in energy products.

Agricultural and fishing products grew 3.8% to a record high of $3.8 billion in December. Exports of canola led the increase.

Widespread gains in imports

Imports of industrial goods and materials grew 2.6% to $8.6 billion in December as prices increased. Metals and metal ores contributed the most to the gain, rising 4.0% on higher imports of precious metals and alloys, primarily gold. Chemicals and plastics increased 3.1% because of higher volumes.

Imports of automotive products rose 3.6% to $6.0 billion because of higher volumes. Motor vehicle parts, up 5.8%, led the increase. Imports of trucks and other motor vehicles grew 10.3% mostly because of higher imports of trucks and off-highway dump trucks.

Imports of machinery and equipment increased 1.3% to $10.9 billion in December. Industrial and agricultural machinery, up 4.5%, contributed the most to the sector's gain. Imports of aircraft and other transportation equipment were down 8.3%.

Energy products fell 7.5% to $4.3 billion, the only sector to decrease in December. Volumes declined 8.1%, a second consecutive monthly decrease. Lower imports of crude petroleum led the decline, followed by petroleum and coal products.

Trade balance

Note: In general, merchandise trade data are revised on an ongoing basis for each month of the current year. Current year revisions are reflected in both the customs and balance of payments (BOP) based data. The previous year's customs data are revised with the release of the January and February reference months as well as on a quarterly basis. The previous two years of customs based data are revised annually and are released in February with the December reference month. The previous year's BOP based data are revised with the release of the January, February and March reference months. Revisions to BOP based data for the previous three years are released annually in June with the April reference month.

Factors influencing revisions include late receipt of import and export documentation, incorrect information on customs forms, replacement of estimates produced for the energy sector with actual figures, changes in classification of merchandise based on more current information, and changes to seasonal adjustment factors.

Note to readers

Merchandise trade is one component of Canada's international balance of payments (BOP), which also includes trade in services, investment income, current transfers as well as capital and financial flows.

International merchandise trade data by country are available on both a BOP and a customs basis for the United States, Japan and the United Kingdom. Trade data for all other individual countries are available on a customs basis only. BOP data are derived from customs data by making adjustments for factors such as valuation, coverage, timing and residency. These adjustments are made to conform to the concepts and definitions of the Canadian System of National Accounts.

Data in this release are on a BOP basis, seasonally adjusted in current dollars. Constant dollars are calculated using the Laspeyres volume formula.

Changes to the classification

Statistics Canada has reduced the number of 10-digit Harmonized Commodity Coding and Description System (HS) classification codes that are used to report the commodity detail in Canada's merchandise import trade data. This will improve efficiency, maintain data quality and reduce response burden.

These changes are in effect as of January 2012 and coincide with the World Customs Organization 2012 amendments to the 6-digit HS classification codes as well as with Finance Canada's changes to the 2012 Customs Tariff at the 8-digit HS codes. To obtain an HS 2012 Concordance Table, contact the International Trade Division's Marketing and Client Services Section (trade@statcan.gc.ca).

To contact the reporter on this story: Ilan Kolet in Ottawa at ikolet@bloomberg.net

To contact the editor responsible for this story: Marco Babic at mbabic@bloomberg.net

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