| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Balance | C$-0.1B | C$-1.1B to C$0.5B | C$-1.1B | C$0.684B | C$-0.287B |
| Imports - M/M | 0.3% | -1.7% | -1.4% | ||
| Imports - Y/Y | 1.6% | 4.4% | |||
| Exports - M/M | -1.0% | -0.4% | -1.2% | ||
| Exports - Y/Y | -0.5% | 6.9% |
Highlights
Canada's goods trade picture looked worse than expected in August and was revised into deficit for July. With the July revision, Canada saw a sixth consecutive trade shortfall in August.
The trade balance showed a deficit of C$1.1 billion in August after a revised deficit of C$0.287 billion in July (July was previously reported at a C$0.684 billion surplus). Forecasters in an Econoday survey looked for a modest deficit of C$0.1 billion for August.
Imports rose by 0.3 percent on the month in August and were up by 1.6 percent on the year. Exports slipped 1.0 percent on the month and were down 0.5 percent on the year. In real or volume terms, exports edged up 0.1 percent on the month, as lower prices for oil exports weighed heavily on the nominal value of exports. Imports rebounded in August from July after falling 1.4 percent in July from June. In real terms, imports rose 0.4 percent in August from July.
Exports to the US dropped by 4.3 percent in August, partly due to lower exports of energy products. Meanwhile, imports from the US were up 0.9 percent. As a result, Canada's goods trade surplus with the United States narrowed from $10.5 billion in July to $8.0 billion in August.
The trade balance showed a deficit of C$1.1 billion in August after a revised deficit of C$0.287 billion in July (July was previously reported at a C$0.684 billion surplus). Forecasters in an Econoday survey looked for a modest deficit of C$0.1 billion for August.
Imports rose by 0.3 percent on the month in August and were up by 1.6 percent on the year. Exports slipped 1.0 percent on the month and were down 0.5 percent on the year. In real or volume terms, exports edged up 0.1 percent on the month, as lower prices for oil exports weighed heavily on the nominal value of exports. Imports rebounded in August from July after falling 1.4 percent in July from June. In real terms, imports rose 0.4 percent in August from July.
Exports to the US dropped by 4.3 percent in August, partly due to lower exports of energy products. Meanwhile, imports from the US were up 0.9 percent. As a result, Canada's goods trade surplus with the United States narrowed from $10.5 billion in July to $8.0 billion in August.
Market Consensus Before Announcement
August's trade balance is seen in deficit of C$0.1 billion versus July's surplus of C$0.684 billion and June's deficit of C$1.79 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.
