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Merchandise Trade Analysis – December 2015

Canadian exporters ended 2015 on a high note, posting strong gains across nearly all major industrial sectors. Merchandise exports were up 3.9 per cent for the month of December – the second best monthly performance in the past year and a half – to reach $45.4 billion. On a year-over-year basis, December marks the first time since January that exports in 2015 were significantly higher than 12 months prior.

exports by month chart image

Imports into Canada were also higher in December. Driven by a combination of higher prices (because of the falling Canadian dollar) and volumes, imports rose 1.6 per cent, hitting $45.9 billion for the month. Purchases of foreign-made consumer goods rose considerably in December, as did buying of metals and mineral products. Eastern Canadian provinces also saw a spike in shipments of crude oil into that part of the country. 

trade defecit chart image

December’s surge in exports has helped to reduce significantly the size of Canada’s trade deficit. From $2.3 billion in October, the monthly gap between exports and imports has fallen to $585 million – its lowest level since July. 

export product growth chart image

Adding to the good news, December’s export gains were broad-based, unlike November’s increase which was heavily concentrated in three sectors. Every one of the eleven major product categories posted higher export numbers in December, with the exception of the energy sector which once again struggled with the impact of falling oil prices. Leading the way was a spike in exports from the volatile aerospace sector. Recovering from a sharp drop in November, aerospace-related exports were up 26.4 per cent to close out 2015. Exports of metals and mineral products rose 8.5 per cent. Foreign sales of machinery and equipment were 7.2 per cent higher and consumer goods exports rose by 6.4 per cent. 

Export growth was also broad-based from a geographic perspective. Every province except BC posted higher export numbers in December. Even Alberta enjoyed a good month as energy exports recovered some of October and November’s losses.

top export markets chart image

December’s export gains were once again led by higher sales to the United States, which rose by $962 million (2.9 per cent), building on November’s 2.1 per cent gain. In spite of lower exports to the United Kingdom and France, exports to the EU were also up sharply, erasing the sudden drop the previous month. Exports to Hong Kong and Singapore were also up considerably, although those locations are major transshipment hubs, meaning that they are unlikely to be the final destination for Canadian goods.

On the import side, the increase was driven by continued growth in purchases of US goods, which rose 1.3 per cent in December (an increase of $398 million). However, the biggest story on the import side was a spike in sales from Germany. Imports from that country jumped 31.8 per cent in December – an increase of $404 million in just one month.

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