Canada posts narrower June trade surplus despite falling exports, imports

OTTAWA Canada posted a narrower trade surplus in June, the second in as many months, despite significant declines in exports and imports of crude oil, aircraft and other transportation equipment, official data showed on Friday.

Statistics Canada reported a surplus of $136 million in goods. The agency had reported a trade surplus of $762 million in May but revised that figure downward on Friday to $556 million.

Analysts in a Reuters poll had forecast a trade deficit of $300 million. Friday marked the first time Canada had posted back-to-back trade surpluses since November and December 2016.

Statscan said total Canadian exports in June fell by 5.1 per cent to $50.3 billion.

Imports dropped by 4.3 per cent to $50.2 billion, the lowest level since November 2018.

The Canadian dollar held a near six-week low of 1.3248, or 75.48 cents U.S. after the data release.

“It wasn’t a great month, but it’s been a very strong quarter,” said Stephen Tapp, deputy chief economist at Export Development Canada. “Canadian trade is kind of coming back down to earth after a long string of record-setting performance.”

“We’re hoping that this one month doesn’t make a broader trend,” he added.

Exports of energy products fell 7.4 per cent, Statscan said, while crude exports were down 8.6 per cent — the first monthly decrease seen this year. Prices declined 13.5 per cent while volumes rose 5.6 per cent.

June’s decline, however, remains well above the low reported at the end of last year. Statscan said crude oil exports have more than doubled since the low seen in December 2018, largely because of higher prices.

Meanwhile, exports of aircraft and other transportation equipment were down 25.1 per cent in June. Exports of aircraft led the decline, falling 40.8 per cent, with fewer commercial aircraft being sent to the United States.

However, overall second quarter exports of aircraft, Statscan said, were up — rising 39.4 per cent compared to the previous quarter.

Canada also imported fewer aircraft in June, aircraft dropped 54.9 per cent, largely because of fewer imports of airliners from the United States. Meanwhile, energy imports dropped 14.8 per cent — driven largely by lower crude shipments from the United States and Saudi Arabia.

Canada sent 74.8 per cent of its goods exports to the United States in June. Exports to the United States fell 3.9 per cent, largely because of a drop in crude oil, while imports decreased 3.8 per cent.

As a result, Canada’s trade surplus with the United States narrowed slightly in June, to $5.7 billion from $5.9 billion in May.