| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Balance | C$-1.9B | C$0.638B | C$-1.927B | C$-1.611B |
| Imports - M/M | 1.9% | -1.6% | ||
| Exports - M/M | 5.5% | -2.6% |
Highlights
Canada's goods trade balance unexpectedly swung to a C$0.638 billion surplus in June from a revised C$1.611 billion deficit in May (previously reported at a C$1.927 billion deficit). Forecasters in an Econoday survey looked for a deficit of C$1.9 billion for June.
The surplus came after three straight monthly goods trade deficits and reflected a 5.5 percent rise in exports, with exports of crude oil and unwrought gold accounting for three-quarters of the rise. Imports were up by 1.9 percent.
Exports saw increases across 9 of 11 sectors. In real terms, exports rose 3.8 percent in June from May. In nominal terms, leading the way were energy product exports, up 11.7 percent in June, paced by crude oil, up 13.3 percent. Crude prices were up but the increase reflected a rise in volume terms mostly because of higher volumes sold to Asia with the recent expansion of the Trans Mountain Pipeline. Within the metallic and nonmetallic minerals category, which gained 11.8 percent, exports of unwrought gold rocketed by 35.3 percent.
On the import side, increases were seen in 9 of 11 sectors. In real/volume terms imports rose 1.3 percent in June from May. The biggest swing factor was imports of motor vehicles and parts, up 5.1 percent with passenger cars and light trucks rising 8.2 percent on the month to a record $6.8 billion. This mostly reflected a bounceback from factory disruptions and slow deliveries from the U.S. starting in late 2023. Consumer goods was another big mover on the import side, up 3.7 percent. This was paced by pharma products imported from the U.S., up 16.9 percent after two straight monthly decreases.
Regionally, the surplus with the U.S. widened for a third straight month reaching C$9.4 billion in June, up from C$8.8 billion in May, its widest since November 2023. The trade deficit with countries excluding the U.S. declined to C$8.7 billion in June from C$10.4 billion in May as exports bounced up by 15.7 percent in June after dropping 13.0 percent in May. Imports ex-U.S. edged up 2.1 percent in June fron May.
The surplus came after three straight monthly goods trade deficits and reflected a 5.5 percent rise in exports, with exports of crude oil and unwrought gold accounting for three-quarters of the rise. Imports were up by 1.9 percent.
Exports saw increases across 9 of 11 sectors. In real terms, exports rose 3.8 percent in June from May. In nominal terms, leading the way were energy product exports, up 11.7 percent in June, paced by crude oil, up 13.3 percent. Crude prices were up but the increase reflected a rise in volume terms mostly because of higher volumes sold to Asia with the recent expansion of the Trans Mountain Pipeline. Within the metallic and nonmetallic minerals category, which gained 11.8 percent, exports of unwrought gold rocketed by 35.3 percent.
On the import side, increases were seen in 9 of 11 sectors. In real/volume terms imports rose 1.3 percent in June from May. The biggest swing factor was imports of motor vehicles and parts, up 5.1 percent with passenger cars and light trucks rising 8.2 percent on the month to a record $6.8 billion. This mostly reflected a bounceback from factory disruptions and slow deliveries from the U.S. starting in late 2023. Consumer goods was another big mover on the import side, up 3.7 percent. This was paced by pharma products imported from the U.S., up 16.9 percent after two straight monthly decreases.
Regionally, the surplus with the U.S. widened for a third straight month reaching C$9.4 billion in June, up from C$8.8 billion in May, its widest since November 2023. The trade deficit with countries excluding the U.S. declined to C$8.7 billion in June from C$10.4 billion in May as exports bounced up by 15.7 percent in June after dropping 13.0 percent in May. Imports ex-U.S. edged up 2.1 percent in June fron May.
Market Consensus Before Announcement
June's trade balance is seen in deficit of C$1.9 billion which would match May's deficit of C$1.9 billion and compare with April's deficit of C$1.3 billion.
Definition
The merchandise trade balance measures the difference between imports and exports of goods. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade and can offer a guide to an economy's competitiveness. Nominal data are supplied with regards to principal trading partners and product classification.
Description
Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect currency values in foreign exchange markets. This is particularly true for Canada which relies on exports and particularly those to the U.S. for growth. It should be noted that this report focuses solely on goods trade - it leaves services trade for the quarterly national accounts and balance of payments reports.
Imports indicate demand for foreign goods while exports show the demand for Canadian goods in the U.S. and elsewhere. The Canadian dollar is particularly sensitive to changes in its trade balance with the U.S. For the most part, Canada's trade balance is in surplus thanks to its exports to the U.S. Both the nominal export and import values are split into volume (real) and price components. This permits trade data to be analyzed for both changes in trade patterns as well as changing prices. This has been particularly important of late given energy price volatility and the impact on Canada's merchandise shipments. A word of caution -- the data are subject to large monthly revisions. Therefore, it can be misleading to form opinions on the basis of one month's data.
The bond market is sensitive to the risk of importing inflation. This report gives a breakdown of trade with major countries so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.
Imports indicate demand for foreign goods while exports show the demand for Canadian goods in the U.S. and elsewhere. The Canadian dollar is particularly sensitive to changes in its trade balance with the U.S. For the most part, Canada's trade balance is in surplus thanks to its exports to the U.S. Both the nominal export and import values are split into volume (real) and price components. This permits trade data to be analyzed for both changes in trade patterns as well as changing prices. This has been particularly important of late given energy price volatility and the impact on Canada's merchandise shipments. A word of caution -- the data are subject to large monthly revisions. Therefore, it can be misleading to form opinions on the basis of one month's data.
The bond market is sensitive to the risk of importing inflation. This report gives a breakdown of trade with major countries so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.
