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Falling crude oil prices drive Canadian exports lower in January

Published by Brad Fougere on March 06, 2015

Merchandise Trade Release Notes – January 2015

The economic realities of lower oil prices hit home for Canada’s export performance and trade balance in January. Overall exports fell by 2.8 per cent from December to January – a decrease of $1.2 billion in a single month and the largest month-over-month decline in two-and-a-half years. At $42.6 billion, exports are now at their lowest level in 12 months.

For their part, imports were essentially unchanged from their revised December level of $45.1 billion. 

As a result, Canada’s trade balance is continuing its downward trajectory to begin 2015. The trade deficit more than doubled in a single month, rising to $2.5 billion in January. That total represents the largest monthly trade deficit since July 2012.


Canada’s weak export numbers can be pinned almost exclusively on the energy sector and the impact of falling prices. Energy exports fell by 14.7 per cent in January. The vast majority of that decrease came in crude oil exports, the value of which were down a full 23.0 per cent in just a single month. By comparison, exports of natural gas and refined petroleum were down only slightly, at 1.2 per cent and 0.6 per cent, respectively. Although dwarfed in size by Canada’s fossil fuel exports, sales of electricity to the US were also down significantly – by 11.0 per cent over December.  


Removing energy products from the equation dramatically improves the picture for Canadian exporters. Non-energy exports in January fell by just $11.7 million – essentially a rounding error given that non-energy exports are worth about $35.6 billion monthly.

The motor vehicles and aerospace sectors enjoyed the biggest gains in January. Foreign sales of aircraft and parts were up 8.0 per cent ($150 million), helping to recover December’s losses. For their part, motor vehicles exports increased by 3.1 per cent ($207 million) – their third consecutive month-over-month increase. Foreign sales of Canadian motor vehicles and parts are now at their highest level since April 2007.

Farm, fish and intermediate food products exports also posted solid gains in January, as did exports of forestry products.

At the other end of the spectrum, foreign sales of metal and non-metallic mineral products were down 8.8 per cent in January, reflecting in part a weakening price environment for those goods.



Exports were flat or down in most provinces, with the notable exception of Manitoba which posted a 10.5 per cent jump to begin the year on the strength of higher sales of consumer goods, electricity and agricultural products. While oil prices significantly drove down exports in Alberta (13.6 per cent), the largest monthly drop was actually in Quebec, where exports fell by 16.2 per cent last month. Quebec’s losses were spread across a range of sectors, including agriculture and food, industrial machinery and equipment, as well metals and mineral products.

On the import side, a spike in Canadian purchases of foreign industrial machinery and equipment – as well as of electronics and electrical products – offset a steep drop in energy imports in January.

 

 

Found in: StatsCan

National Office

Alberta British Columbia
Manitoba New Brunswick
Newfoundland & Labrador Nova Scotia
Ontario Québec
Prince Edward Island Saskatchewan