Canada August International Merchandise Trade Report (Text)

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

Canada’s merchandise imports fell 3.1% and exports edged down 0.1% in August. As a result, Canada’s trade deficit with the world narrowed from $2.5 billion in July to $1.3 billion in August.

Imports fell to $38.8 billion as declines occurred in every sector, except energy products. Volumes, which fell in every sector, were down 2.2% in August.

Exports amounted to $37.5 billion as a decrease in prices offset an increase in volumes. The largest decline occurred in exports of industrial goods and materials, while exports of energy products increased after six consecutive monthly declines.

Imports from the United States fell 4.3% to $24.2 billion, while exports rose 1.4% to $27.6 billion. Consequently, Canada’s trade surplus with the United States increased from $2.0 billion in July to $3.5 billion in August.

Exports to countries other than the United States fell 3.9% to $9.8 billion, mainly the result of a 19.5% decline in exports to Japan. Imports from countries other than the United States declined 1.0% to $14.6 billion. Consequently, Canada’s trade deficit with countries other than the United States increased from $4.5 billion in July to $4.8 billion in August.

Imports decline as volumes down in every sector

After four consecutive monthly increases, imports of industrial goods and materials fell 7.4% to $7.9 billion in August. Decreases in the value of imports were widespread throughout this sector. The largest factor was an 11.6% decline in imports of metals and metal ores, mainly precious metals and alloys.

Imports of machinery and equipment decreased 3.8% to $10.4 billion, as volumes and prices fell. The decline was led by other machinery and equipment, down 5.6% to $5.0 billion.

Imports of automotive products declined 3.3% to $6.7 billion in August, as volumes (-1.9%) and prices (-1.4%) fell. The decrease in the sector was largely the result of lower imports of motor vehicle parts as well as trucks and other motor vehicles.

On the strength of crude petroleum, the energy products sector grew 6.1% to $4.1 billion, and partially offset the decline in overall imports. Crude petroleum rose 15.4% to $2.6 billion, as a result of higher volumes and prices. Imports of petroleum and coal products fell 5.5% to $1.2 billion, on lower volumes.

Industrial goods and materials largest contributor to the decline in exports

Exports of industrial goods and materials fell 6.1% to $8.8 billion, as decreases were recorded throughout the sector. The biggest factors were exports of fertilizers and fertilizer materials (-22.3%) as well as iron ores, concentrates and scrap (-26.8%) on lower volumes. A 13.3% increase in exports of precious metals and alloys partially offset the decrease.

Exports of automotive products declined 2.3% to $5.7 billion in August. Motor vehicle parts fell 6.0% to $1.5 billion, mainly on lower volumes.

Exports of energy products rose 5.5% to $8.6 billion, halting six consecutive monthly decreases. Exports of crude petroleum, the main contributor, increased 9.1% to $5.5 billion, mostly on higher prices. Also, petroleum and coal products rose 10.6%. These gains were partially offset by the fourth consecutive monthly decline in exports of coal and other bituminous substances.

Exports of agricultural and fishing products grew 6.5% to $3.6 billion. The main factor was wheat exports, which rose 57.5% as volumes were up for the first time in four months.

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 and in current dollars. Constant dollars are calculated using the Laspeyres volume formula.

For more information on seasonal adjustment, see Seasonal adjustment and identifying economic trends (http://www.statcan.gc.ca/pub/11-010-x/2010003/part-partie3- eng.htm) .

New aggregation structure

Statistics Canada will introduce the North American Product Classification System (NAPCS) for merchandise import and export statistics. The new structure will replace the classification structures known as the summary import groups (SIG) and the summary export groups (SEG) and the higher level aggregations (major groups, subsectors, sectors and sections) that have been in use for several decades.

This month’s release is the last Canadian international merchandise trade data release based on the SIG and SEG classification structure. As of November 8 (September reference month), Canadian international merchandise trade data releases will be based on NAPCS.

Revised data based on NAPCS for the reference period of January 1988 to August 2012 will be disseminated on October 18.

Readers interested in this upcoming change can find more detailed information on our web page dedicated to classification (http://www.statcan.gc.ca/subjects-sujets/standard-norme/napcs- scpan/notice-avis/napcs-scpan-02-eng.htm) consultation and notification.

Revisions

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 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 were revised with the release of the January, February, March and April 2012 reference months.

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.

Revised data are available in the appropriate CANSIM tables, free of charge.

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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