MNI DATA ANALYSIS:Trade Bal Swings To Surplus;Exprts,Imprts Dn>

By Yali N'Diaye

     OTTAWA (MNI) - Canada's merchandise trade balance unexpectedly 

posted a surplus in August for the first time since December 2016, with 

a weak auto and parts sector weighing on both export and import 

performances, data released Friday by Statistics Canada showed. 

     The goods trade balance posted a surplus of C$0.5 billion, the 

largest since November 2016, while analysts' forecasts in a MNI survey 

had centered on a C$0.5 billion deficit. July's deficit estimate was 

revised to -C$0.2 billion from -C$0.1 billion. 

     In real terms, the balance also swung to a surplus in August (C$0.1 

billion), following a C$0.2 billion deficit in July. 

     --AUTO PLANT SHUTDOWNS WEIGH 

     Exports declined 1.1% on the month to C$50.5 billion. Volumes were 

down 0.7%, following gains of 0.1% in July and 1.9% in June. 

     Imports fell 2.5% to C$50.0 billion, with volumes down 1.5%, 

showing that prices explained a fair amount of the August weakness, 

although lower activity explained the larger part. 

     "Atypical planned shutdowns" in auto manufacturing weighed on both 

exports and imports of motor vehicles and parts, with exports down 6.2% 

and imports down 3.8%. 

     Excluding autos and parts, total exports would still have been down 

but by just 0.2%, and would even have increased 0.2% in real terms 

instead of a 0.7% contraction.

     On the import front, nominal imports excluding autos and parts were 

down 2.2%, with volumes down 1.4%, showing a lack of momentum in 

domestic demand, including a 0.3% decline in machinery and equipment 

imports. 

     --STEEL EXPORTS RISE, ALUMINUM DOWN 

     In August, mutual tariffs on steel and aluminum products imports 

were still in effect in the U.S. and Canada. 

     However, exports of steel to the U.S. were up 6.3%, while exports 

of aluminum decreased 13.2%. 

     Imports of steel products from the U.S. fell 12.8% while aluminum 

imports from the U.S. rose 2.6%. 

     Overall, exports to the U.S. declined 1.2% after gains of 3.0% in 

July and 2.5% in June, while imports fell 1.3%. 

     As a result, the trade balance with the U.S. was little changed on 

the month, with a surplus of C$5.3 billion, down from C$5.4 billion in 

July. 

     The trade deficit with non-US countries narrowed to C$4.8 billion 

from C$5.5 billion. 

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

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