Canadian trade surplus gap keeps closing

OTTAWA — Canada’s merchandise trade surplus edged down for the second consecutive month in July as imports increased at a slightly faster pace than exports, particularly from the United States.

Exports were up for the third consecutive month, reports Stats Canada and imports for the second. This marked a turnaround from the considerable downward movements earlier this year, the agency says.

Canadian companies exported $38.5 billion worth of merchandise, up 2.1 percent from June, and they imported $34.6 billion worth, a 3.1 percent gain.

July’s largest boost came from machinery and equipment, where, on the strength of aircraft engines and transportation equipment, exports were up 4.9 percent to $8.1 billion.

About $7.8 billion worth of energy products were exported in July, up 4.6 percent from June. The bulk of the strength came from crude petroleum, where exports surged 6.8 percent to a record high $3.5 billion.

Exports of industrial goods, materials and most metals advanced for a third straight month, rising 3.7 percent to a record high $8.1 billion, while chemicals, plastics and fertilizers rose 2.1 percent, and the agricultural and fishing products sector rebounded on exports following three straight monthly declines, rising 9.8 percent in July.

On the downside, mainly due to a slumping auto manufacturing sector, automotive product exports fell 7.2 percent. The largest contributors to July’s decline were passenger autos and chassis (-10.3%), and motor vehicle parts (-6.1%). Trucks and other motor vehicles exports edged down 1.2 percent.

Except for a small increase in June, exports of forestry products have been falling since February this year, slipping another 1.2 percent in July. The slowing housing market in the U.S. is to blame.

IMPORTS:

Automotive exports may has yielded, but imports got a big boost from the same sector, increasing 11.2 percent to $7.3 billion, their highest level since December 2002. After two consecutive months of declines, imports of trucks and other motor vehicles surged 19.4 percent to a record high $1.6 billion.

That boost is likely triggered by trucking carriers pre-buying tractors in advance of next year’s tough, new engine emission rules mandated by the EPA, coupled with increasing freight demand in Canada — especially in the West.

Energy imports edged up 0.7 percent as prices rose 4.6 percent while volume fell 3.8 percent.

Imports of agricultural and fishing products registered their fifth consecutive gain, rising 3.8 percent to a record high $2 billion. Contributing to the surge were fruits and vegetables and other agricultural and fishing products.