Exports of motor vehicles and parts climbed 8.2% to $8.3 billion in January, the highest level since May 2019. PHOTO courtesy GM.
Canada’s international trade started of 2023 on strong footing, the latest data from Statistics Canada reveals. Canadian merchandise exports rose 4.2% to $67.0 billion in January, while merchandise imports increased 3.1% to $65.1 billion. In real or volume terms, the picture was even more upbeat, with exports and imports up 5.3% and 4.1%, respectively.
“The upside surprise in today’s trade report is another sign that Canada’s economy is performing better than expected to start 2023. In particular, export activity continues to be bolstered by solid global demand for Canadian commodities and by a recovery in auto production. But with global economic growth slowing due to rapid central-bank policy tightening, it is difficult to see the momentum continuing in the coming months,” comments Alan Arcand, chief economist with Canadian Manufacturers & Exporters.
Canada’s merchandise trade surplus widened from $1.2 billion in December to $1.9 billion in January, the eleventh surplus in the past thirteen months. Breaking the numbers down, our trade surplus with the U.S. widened from $8.4 billion in December to $9.0 billion in January. At the same time, Canada’s trade deficit with the rest of the world narrowed slightly from $7.2 billion to $7.1 billion.
The export gains were widespread, with all product sections increasing except energy products. Indeed, non-energy exports rose 6.1% to a record $51.6 billion in January.
Of particular interest to metalworking, exports of motor vehicles and parts climbed 8.2% to $8.3 billion in January, the highest level since May 2019. Exports of passenger cars and light trucks drove the gain, corresponding with an increase in production at many Canadian assembly plants.
“This is further evidence that the shortage of semiconductors and other supply chain challenges that have plagued the industry for months are continuing to subside,” Arcand points out.
Following a 6.7% decline in December, exports of metal and non-metallic mineral products rose 8.3% to $7.5 billion in January. Exports of unwrought gold, silver, and platinum group metals, and their alloys—a category dominated by unwrought gold—contributed the most to the monthly gain.
Exports to the U.S. increased 3.3% to $50.3 billion in January, up for the second month in a row. At the same time, exports to the rest of the world jumped 7.2% to a record $16.7 billion. Among Canada’s major non-U.S. trading partners, exports to China, the U.K, and Japan were up, while exports to Mexico, the EU, and South Korea were down.