Canadian merchandise imports and exports both increased in July as a result of broad-based growth in volumes. The spike in imports were largely attributed to fuel and aircraft. Imports were up 8.3% to $31.7 billion while exports grew 3.3% to $30.3 billion. As a result, Canada registered a trade deficit of $1.4 billion in July compared with a trade surplus of $37 million in June.
The gain in imports stopped 4 months of decline and was the result of an 8.7% rise in volumes as prices edged down 0.4%. Although the increases were widespread, machinery and equipment, automotive products and energy products were the main sources of growth.
The second consecutive monthly advance in exports was attributable to a 5.9% increase in volumes, as prices declined 2.4%. Higher exports of machinery and equipment and automotive products led the increase in overall exports. Declines in exports of energy products tempered the gain.
Merchandise trade is one component of Canada's international balance of payments, which also includes trade in services, investment income, current transfers as well as capital and financial flows.
International merchandise trade data by country are available on both a balance of payments and a customs basis for the United States, Japan and the United Kingdom. Trade data for all other individual countries are available on a customs basis only. Balance of payments data are derived from customs data by making adjustments for characteristics 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.
Canada’s trade surplus with the US shrank to $1.9 billion in July from $3.2 billion in June, as the growth in imports outpaced the increase in exports. Imports from the United States rose 9.9%, mainly as a result of higher imports of organic chemicals and aircraft. Exports were up 2.5%, mostly due to increases in exports of aircraft.
Imports and exports to countries other than the United States both advanced 5.7%, and the trade deficit with this group of countries grew to $3.4 billion in July from $3.2 billion in June.