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Canadian international merchandise trade, July 2020

Released: 2020-09-03

In July, Canadian merchandise imports and exports continued to build on the strong gains that were observed in June. Imports increased 12.7% in July, while exports rose 11.1%. The largest contributor to this growth for both imports and exports was the motor vehicles and parts product category. Compared with February 2020, the month before the COVID-19 pandemic's economic impact was felt in Canada, imports (-4.1%) and exports (-6.0%) were down.

Chart 1  Chart 1: Merchandise exports and imports
Merchandise exports and imports

Canada's merchandise trade deficit with the world widened from $1.6 billion in June to $2.5 billion in July.

To explore the most recent results from Canada's international merchandise trade in an interactive format, see the new "International merchandise trade monthly interactive dashboard."

Imports of motor vehicles and parts increase

Total imports rose 12.7% in July to reach $47.9 billion, which was $2.0 billion below the pre-pandemic level recorded in February. Increases were observed in 9 of the 11 product sections in July. In real (or volume) terms, imports were up 11.2%.

Chart 2  Chart 2: Contributions to the monthly change in imports, by product, July 2020
Contributions to the monthly change in imports, by product, July 2020

In July, as was the case in June, motor vehicles and parts contributed the most to the growth in imports. March to June are usually the months when imports of motor vehicles are at their highest. Because COVID-19 heavily impacted the auto industry during this period, most assembly plants adjusted by increasing production in July and having shorter seasonal shutdowns this summer. This led to an atypical increase from June to July in supply and demand for motor vehicles and parts domestically and abroad.

As a result, imports of motor vehicles and parts increased 50.3% to reach $8.1 billion, which was still 11.2% below the February level. Imports of passenger cars and light trucks rose 71.9% in July, mainly on higher imports from the United States and Mexico. Imports of motor vehicle engines and parts were up 38.7%, mostly on increased imports from Japan and the United States.

Chart 3  Chart 3: Imports and exports of passenger cars and light trucks, and motor vehicle engines and parts
Imports and exports of passenger cars and light trucks, and motor vehicle engines and parts

Imports of electronic and electrical equipment and parts rose 14.8% in July, mainly on higher imports of communication, and audio and video equipment. This increase was mainly the result of higher imports of cellphones from China, Vietnam and South Korea. The reopening of the retail industry in Canada, as well as the arrival on the market of new models, contributed to the July increase in cellphone imports.

Imports of consumer goods rose 4.8% in July. Widespread increases throughout the subcategories were led by imports of miscellaneous goods and supplies (+18.9%). Imports of this product group were up on higher imports of other protective equipment and diagnostic products. In July, imports of consumer goods surpassed their February level. Imports of consumer goods have been increasing since May, in part because of the rise in imports of personal protective equipment.

Imports of industrial machinery, equipment and parts rose 9.2%, the third consecutive monthly gain since a 20.8% drop in April. All subcategories except one posted increases in July. Imports of industrial machinery, equipment and parts were 6.2% lower in July compared with the February level.

Exports of passenger cars and light trucks as well as crude oil increase

In July, total exports increased 11.1% to $45.4 billion—$2.9 billion lower than the February level. The growth in exports was also widespread in July, with 10 of the 11 product sections posting increases. Non-energy exports were up 9.9%. In real (or volume) terms, total exports rose 8.6%.

Chart 4  Chart 4: Contributions to the monthly change in exports, by product, July 2020
Contributions to the monthly change in exports, by product, July 2020

Exports of motor vehicles and parts increased 37.0% to $8.2 billion, exceeding the February level by 11.7%. As explained with the imports of motor vehicles and parts, the auto industry adjusted to the impact of COVID-19 by ramping up production and going through a shorter-than-usual shutdown period in July. This led to higher exports of passenger cars and light trucks (+42.4%) and motor vehicle engines and parts (+30.7%). These increases were mainly the result of higher exports to the United States.

Exports of energy products were up 18.9%, the third consecutive monthly increase. Despite the three monthly gains, exports of energy products were still 22.4% below the February level. In July, exports of crude oil (+25.0%) contributed the most to the growth. Both higher prices and higher volumes were behind the increase in crude oil exports in July.

Chart 5  Chart 5: Canadian exports of crude oil and bitumen
Canadian exports of crude oil and bitumen

Trade with the United States increases

Following a 27.8% increase in June, imports from the United States rose 16.2% to $30.7 billion in July, mainly on higher imports of motor vehicles and parts. However, imports from the United States were 5.9% lower compared with February.

In July, exports to the United States rose 15.1% to $33.5 billion, mainly on higher exports of motor vehicles and parts, and crude oil. Exports to the United States were 7.2% below the February level. Canada's trade surplus with the United States widened from $2.7 billion in June to $2.9 billion in July.

Chart 6  Chart 6: Canada's imports and exports from the United States and countries other than the United States
Canada's imports and exports from the United States and countries other than the United States

When the average exchange rates of June and July are compared, the Canadian dollar gained 0.3 cents US relative to the American dollar.

Following a 9.7% increase in June, imports from countries other than the United States rose 6.9% to $17.2 billion in July. Imports from Spain (ships), Mexico (passenger cars and light trucks) and Japan (motor vehicles and parts) contributed the most to the increase. The import level from countries other than the United States in July was 0.7% lower than that observed in February.

Exports to countries other than the United States were up 1.1% to $11.9 billion, led by higher exports to Saudi Arabia (refined gold), Japan (copper ores) and Italy (pharmaceutical products). Export levels to countries other than the United States were down 2.3% in July compared with February.

As a result, Canada's trade deficit with countries other than the United States widened from $4.3 billion in June to $5.3 billion in July.

Chart 7  Chart 7: International merchandise trade balance
International merchandise trade balance

Revisions to June merchandise exports and imports

Imports in June, originally reported as $42.9 billion in the previous release, were revised to $42.5 billion in the current month's release. Exports in June, originally reported as $39.7 billion in the previous release, were revised to $40.9 billion, mainly because estimates for crude oil exports were replaced with actual data. These estimates can be subject to larger revisions during times of high volatility in energy prices.

Trade in medical and protective goods

Imports of medical and protective goods declined 6.2% in July following five consecutive monthly increases. Despite the monthly decrease, these imports were 42.8% higher compared with February. The main contributor to the decline in July was medical equipment and products. Imports of medical equipment and products fell 16.6% to $1.3 billion, following an increase of similar magnitude in June. This decline was partially offset by higher imports of other protective equipment and diagnostic products. Exports of medical and protective goods decreased 2.1% in July to $1.6 billion, the second consecutive monthly decline.

Monthly trade in services

Monthly service exports were up 0.6% to $8.7 billion in July, while service imports edged up 0.2% to $8.5 billion.

When international trade in goods and services combined is considered, exports increased 9.3% to $54.1 billion in July, while imports rose 10.6% to $56.3 billion. As a result, Canada's trade deficit with the world for goods and services combined was $2.2 billion in July.




  Note to readers

Merchandise trade is one component of Canada's international balance of payments (BOP), which also includes trade in services, investment income, current transfers, and capital and financial flows.

International trade data by commodity are available on both a BOP and a customs basis. International trade data by country are available on a customs basis for all countries and on a BOP basis for Canada's 27 principal trading partners (PTPs). The list of PTPs is based on their annual share of total merchandise trade—imports and exports—with Canada in 2012. BOP data are derived from customs data by making adjustments for factors such as valuation, coverage, timing and residency. These adjustments are made to conform to the concepts and definitions of the Canadian System of National Accounts.

For a conceptual analysis of BOP-based data versus customs-based data, see "Balance of Payments trade in goods at Statistics Canada: Expanding geographic detail to 27 principal trading partners."

For more information on these and other macroeconomic concepts, see the Methodological Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-607-X) and the User Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-606-G).

Data in this release are on a BOP basis and are seasonally adjusted. Unless otherwise stated, values are expressed in nominal terms, or current dollars. References to prices are based on aggregate Paasche (current-weighted) price indexes (2012=100). Movements within aggregate Paasche prices can be influenced by changes in the share of values traded for specific goods, with sudden shifts in trading patterns—as observed presently with the pandemic—sometimes resulting in large movements in Paasche price indexes. Volumes, or constant dollars, are calculated using the Laspeyres formula (2012=100), unless otherwise stated.

For information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.

Revisions

In general, merchandise trade data are revised on an ongoing basis for each month of the current year. Current-year revisions are reflected in both the customs-based and BOP-based data.

The previous year's customs-based data are revised with the release of data for the January and February reference months, and thereafter on a quarterly basis. The previous two years of customs-based data are revised annually, and revisions are released in February with the December reference month.

The previous year's BOP-based data are revised with the release of data for the January, February, March and April reference months. To remain consistent with the Canadian System of Macroeconomic Accounts, revisions to BOP-based data for previous years are released annually in December with the October reference month.

Factors influencing revisions include the late receipt of import and export documentation, incorrect information on customs forms, replacement of estimates produced for the energy section with actual figures, changes in classification of merchandise based on more current information, and changes to seasonal adjustment factors.

Revised data are available in the appropriate tables.

Real-time data table

Real-time table 12-10-0120-01 will be updated on September 14.

Next release

Data on Canadian international merchandise trade for August will be released on October 6.

Products

The product International merchandise trade monthly interactive dashboard (Catalogue number71-607-X) is now available. This new interactive dashboard is a comprehensive analytical tool that presents monthly changes in Canada's international merchandise trade data on a balance of payments basis, fully supporting the information presented every month in the Daily text.

The product The International Trade Explorer (Catalogue number71-607-X) is now available online.

Customs-based data are now available in the Canadian International Merchandise Trade Database (Catalogue number65F0013X).

The updated Canada and the World Statistics Hub (Catalogue number13-609-X) is now available online. This product illustrates the nature and extent of Canada's economic and financial relationship with the world using interactive graphs and tables. This product provides easy access to information on trade, investment, employment and travel between Canada and a number of countries, including the United States, the United Kingdom, Mexico, China, Japan, Belgium, Italy, the Netherlands and Spain.

Contact information

For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca).

To enquire about the concepts, methods or data quality of this release, contact Benoît Carrière (613-415-5305; benoit.carriere@canada.ca), International Accounts and Trade Division.

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