OTTAWA — Canada posted a merchandise trade deficit of $312 million in December, the first monthly trade deficit since July, as exports of cars and light trucks fell and lower oil prices weighed on energy shipments.
Statistics Canada said Wednesday the result compared with a revised surplus of $1.1 billion in November. The initial reading for November released last month had shown a $1.6-billion surplus.
"The merchandise trade balance returned to deficit in December, though much of the weakening came from a stronger Canadian dollar," BMO economist Shelly Kaushik wrote in a report.
"In real terms, trade flows look to support StatCan’s surprisingly firm flash estimate for fourth-quarter growth."
Last week, Statistics Canada released a preliminary estimate that real gross domestic product increased 1.2 per cent on an annualized basis in the fourth quarter, following a decline of a similar magnitude in the third quarter.
CIBC economist Katherine Judge said net trade will be a positive for what she expects to be modest Q4 GDP growth, with export volumes bouncing back following Q3 supply-side disruptions, and imports dropping off.
"Looking ahead, Canada's trade balance is likely to remain in deficit territory as global demand softens," Judge wrote in a report.
Statistics Canada said Wednesday that total exports fell 1.9 per cent in December to $64.1 billion as shipments of motor vehicles and parts fell 8.2 per cent.
Exports of energy products also fell 3.1 per cent as crude oil exports dropped 4.9 per cent, as lower prices more than offset an increase in crude oil volumes.
Meanwhile, total imports rose 0.2 in December to $64.4 billion. The increase came as imports of consumer goods gained 9.4 per cent, boosted by a 28.1 per cent increase in imports of pharmaceutical products.
In volume terms, total exports fell 0.4 per cent in December while imports rose 1.3 per cent.
In a separate report, Statistics Canada said the country's international trade in services deficit was $700 million in December compared with $900 million in November.
Exports of services rose 1.3 per cent to $16.9 billion, while imports of services gained 0.3 per cent to come in at $17.6 billion.
When international trade in goods and services are combined, Canada posted an overall trade deficit of $1.0 billion in December compared with a surplus of $173 million in November.
This report by The Canadian Press was first published Feb. 7, 2024.
The Canadian Press
