Andrew DiCapua
“Canada’s merchandise exports have gone up again, thanks to a weaker dollar and slightly higher prices. But because CBSA changed how they collect data, it’s tough to pinpoint a clear trend for the last few months of 2024. So far, Canadian exporters are seeing steady volumes and growing demand from U.S. buyers in advance of tariffs. Even so, merchandise exports are on track to grow by about 0.6% in 2024. President Trump’s 25% tariff on Canadian exports is set to kick in 13 days from now, and that’s going to have a big impact on some of our key products.”
Headline
Canadian nominal merchandise exports grew 2.2% in November, with volumes rising only 0.5% on the month. Imports grew 1.8% narrowing the trade deficit from $544 million to $323 million. This was the second month where merchandise exports grew.
Key Takeaways
- 9 of 11 categories contributed to higher data in November. Consumer goods products grew 4.4% on the back of higher pharmaceutical demand from the U.S. Exports of metal and non-metallic minerals grew 3.8% in November as gold exports rose 17% to a record level. Energy exports increased 2.1% as crude oil shipments rose due to higher prices in seasonally adjusted terms.
- Services exports fell 0.2% in November, with imports declining merely 0.1%.
- Overall monthly exports of goods and services rose 1.7%, while imports increased 1.4%.
- Merchandise imports continued to increase in November, rising 1.8% in November due to higher imports of consumer goods, chemicals, and industrial machinery and equipment.
- Exports to the United States rose nearly 6%, while exports to other countries decreased significantly (-10%) due to weaker shipments of gold to Hong Kong. Canada’s trade surplus with the U.S. widened from $6.6 billion to $8.2 billion in November helping the trade deficit narrow.
Implications
- November merchandise exports rose again, partly due to a nearly 2% drop in the Canadian dollar. Export volumes grew by 1.1%, indicating steady demand for Canadian goods.
- It will be a few months before we know if companies are rushing orders ahead of the planned 25% tariff on Canadian exports to the U.S. For now, exports to the U.S. jumped nearly 7%, though this may be inflated by gold and pharmaceuticals.
- Overall, merchandise exports are on track to grow 0.6% in 2024—relatively weak, but there’s still potential for a better outcome next year, despite uncertainty over U.S. trade policy.
- Revisions to October data were minor, but the switch to CBSA’s new digital invoicing system (CARM) will continue to affect trade data in the coming months.
Sources: Statistics Canada; Canadian Chamber of Commerce Business Data Lab
