Statistics Canada reports trade deficit narrowed in February to $983 million

Statistics Canada reports trade deficit narrowed in February to $983 million

Statistics Canada reports trade deficit narrowed in February to $983 million

OTTAWA — Canada’s merchandise trade deficit narrowed to $983 million in February compared with $1.7 billion in January, Statistics Canada said Thursday.

In reporting the results, the agency said it did not appear that COVID-19 had a major impact on trade in February, though trade with China was affected.

Imports from China fell 6.8 per cent in February, while exports to China fell 6.4 per cent.

However, Statistics Canada said a number of North American automotive manufacturers halted production in March as steps taken to slow the spread of COVID-19 in North America took hold and that could have a significant effect on trade.

It also noted that the drop in crude oil prices may impact the results as well as factory closures.

TD Bank economist Omar Abdelrahman said the outlook for trade will likely deteriorate markedly in March and April.

“Importantly, the commodity price shock will also change Canada’s trade landscape in the quarters ahead,” Abdelrahman wrote in a report.

“The nose dive in oil prices will impact Canada’s nominal exports and its terms of trade, which will weigh on national income.”

The smaller trade deficit for February change came as Canada’s exports rose because of higher exports of aircraft, while imports fell in part to lower crude oil imports.

Economists on average had expected a deficit of $1.87 billion for February, according to financial markets data firm Refinitiv.

Exports rose 0.5 per cent to $48.3 billion in February as eight of the 11 sectors moved higher, while in volume terms, exports increased 2.7 per cent.

Exports of aircraft and other transportation equipment and parts rose 18.5 per cent, boosted by aircraft which rose 46.8 per cent to hit their highest level in five years due to an increase in private jet exports. Excluding aircraft, total exports fell 0.3 per cent.

Imports fell 0.8 per cent to $49.3 billion, the lowest level in the past two years as seven of the 11 sectors tracked moved lower, while imports in volume terms fell 1.2 per cent.

Imports of energy products fell 16.0 per cent, with lower crude oil shipments from the U.S. the largest contributor to the decline.

Statistics Canada said monthly exports of services edged down 0.3 per cent to $11.0 billion in February, while imports of services fell 0.5 per cent at $12.7 billion.

Combined, Canada’s trade deficit for goods and services combined totalled $2.7 billion in February

This report by The Canadian Press was first published April 2, 2020.

The Canadian Press