International Trade & Labour Market Trends

Merchandise Trade (January 2020) and Employment (February 2020)

Exports Tumble in January, While Employment Posts Solid Gain in February

highlights

• Merchandise exports fell 2.0 per cent in January, while imports fell by a more modest 0.5 per cent.
• Canada’s trade deficit widened from $732 million in December 2019 to $1.5 billion in January.
• Exports fell in 9 of 11 major product types, highlighted by significantly lower exports of motor vehicle and parts, energy products, and aircraft.
• Exports also to most major trading partners also fell, including to the United States.
• Employment rose by 30,300 in February, the third consecutive solid monthly advance.
• The unemployment rate inched up 0.1 percentage points to 5.6 per cent.
• The manufacturing sector added 16,000 jobs, leaving employment levels unchanged from 12 months ago.
• Quebec boasted the strongest job gains in February, with employment climbing by 20,000.

MERCHANDISE EXPORTS DROP 2.0 PER CENT IN JANUARY

Canadian exporters started the year on the wrong foot. Merchandise exports fell by 2.0 per cent to $48.1 billion in January. Imports also fell, albeit by a more modest 0.5 per cent to $49.6 billion. In volume terms, exports fell an even steeper 3.1 per cent, while imports were also down 0.5 per cent. This disappointing release suggests that Canada’s trade sector was already on shaky ground prior to the rail blockades and coronavirus outbreak.

TRADE DEFICIT WIDENS TO $1.5 BILLION IN JANUARY

With exports falling more steeply than imports, Canada’s trade deficit widened from $732 million in December 2019 to $1.5 billion in January 2020. Canada’s trade surplus with the United States narrowed from $4.7 billion to $3.6 billion, the smallest surplus since February 2019. At the same time, our trade deficit with the rest of the world narrowed from $5.4 billion to $5.0 billion.

WIDESPREAD LOSSES ACROSS MAJOR PRODUCT TYPES

January’s fall in exports was broad-based, with 9 of 11 major sectors posting declines. The biggest decline was recorded in motor vehicle and parts, reflecting temporary shutdowns at assembly plants and the permanent closure of GM’s Oshawa facility. Energy products also fell on the month, as unseasonably warm weather drove down demand for natural gas in the United States. Aircraft and other transportation and parts was the other product type to post notably lower exports in January. Of the 11 major sectors, only farm, fishing and intermediate food products and metal and non-metallic mineral products posted export gains in January.