MNI 5 THINGS: Canada Goods Trade Gap Widens On Energy Weakness>

--5 Things We Learned From Canadian Merchandise Trade Data

By Yali N'Diaye

     OTTAWA (MNI) - The following are the key points from the December 

data on the Canadian merchandise trade data released Wednesday by 

Statistics Canada: 

     - The goods trade deficit widened to a record C$4.6 billion in 

December, while analysts in a MNI survey had expected a deficit of C$2.8 

billion. The deterioration stemmed from a combination of higher imports 

and lower exports. 

     - Energy explained much of the weaker-than-expected performance in 

December. Overall exports fell 3.8% to C$46.3 billion, the largest 

decrease since July 2017, largely due to lower oil prices. Exports of 

energy products fell 21.7%, the largest decline in ten years, mostly on 

lower prices for crude oil. In volume, energy exports were down 4.3%. 

Exports excluding energy edged down 0.1% on the month, while volumes 

contracted 0.4%. The release of trade data was delayed due to the U.S. 

government shutdown, and Statistics Canada already reported Friday that 

exports edged down 0.1% in the fourth quarter (-1.1% annualized), 

dragged by energy. Energy exports were down 0.6% and non-energy exports 

rose 0.1%, according to GDP data. 

     - Imports rose 1.6% in December to C$50.9 billion, with volumes up 

1.1%. In particular, imports of industrial machinery, equipment and 

parts rose 0.8%. While it should be a positive sign for investment 

activity in Canada, volumes were actually down 0.9%. Consumer goods 

imports increased 3.1%, with household spending remaining a key 

contributor of growth in the fourth quarter, although it is losing 

momentum. Energy imports rose 19.7%, boosted by refined petroleum as 

recent maintenance and turnaround work at some Canadian refineries 

raised demand for foreign refined petroleum products, the agency said. 

     - Regionally, exports to the U.S., Canada's largest market, fell 

3.6%, mostly due to a decline in crude oil exports. The BOC is still 

counting on exports to lift growth going forward, and will need 

confirmation from data given the weak export performance of the fourth 

quarter. 

     - For 2018 as a whole, exports rose 6.5% and imports rose 5.7%. As 

a result, the trade balance narrowed to C$21.7 billion from C$24.6 

billion in 2017. 

--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

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