Canada’s international merchandise trade showed promising signs in September 2023, as exports of goods increased by 2.7%, amounting to $67.0 billion. This surge in exports was driven by higher shipments of energy products and farm-related goods, with exports of crude oil playing a pivotal role in the country’s trade surplus expansion. In contrast, imports also grew but at a slower rate, resulting in a trade surplus that widened from $949 million in August to $2.0 billion in September.
Energy products emerged as a driving force behind the export growth, with a remarkable 10.6% increase in September, totaling $16.9 billion. The surge was predominantly attributed to higher exports of crude oil, which saw an impressive 13.7% increase. This increase was largely due to the extension of voluntary production cuts by the Organization of the Petroleum Exporting Countries and its partners (OPEC+), which drove up crude oil prices. The surge in crude oil exports also helped to boost Canada’s share of energy products in its total exports, reaching the highest level since October 2022.
Exports of farm, fishing, and intermediate food products experienced an 8.1% increase in September, with wheat exports rising by an astounding 56.1%. This surge in wheat exports was attributed to favorable weather conditions that allowed for a rapid harvest in 2023. However, it’s important to note that this was not an entirely unexpected outcome, as a similar gain in wheat exports was observed in September 2022, signaling the impact of a strong global demand for Canadian wheat. In 2023, despite a slight decrease in Canadian wheat production, global supplies have improved.
In contrast to the overall export growth, exports of metal and non-metallic mineral products faced a setback, falling by 10.7% in September. The decline was primarily driven by reduced exports of unwrought gold, silver, and platinum group metals, which decreased by 21.7%. This decline was attributed to lower gold asset transfers within the banking sector, with fewer exports of gold to the United Kingdom and the United States.
Imports saw a modest 1.0% increase in September. The growth in imports was primarily led by the rising demand for passenger cars and light trucks, which surged by 5.8%. Notably, this marked the sixth consecutive monthly increase in these categories, with imports of passenger cars and light trucks increasing by 24.0% over the first nine months of 2023 compared to the same period in 2022. Higher imports from Mexico played a significant role in this increase, despite disruptions caused by strike activity in the United States auto manufacturing industry.
In September, Canada’s exports to the United States increased by 2.6%, driven by higher exports of energy products. Simultaneously, imports from the United States rose by 1.7%. Consequently, Canada’s trade surplus with the United States widened for the third consecutive month, growing from $11.0 billion in August to $11.7 billion in September. Meanwhile, exports to countries other than the United States also saw a 2.9% increase, while imports from these countries declined slightly by 0.2%. As a result, Canada’s merchandise trade deficit with countries other than the United States narrowed from $10.1 billion in August to $9.6 billion in September.
The third quarter of 2023 brought positive news for Canada’s international merchandise trade, with exports rising by 4.3%. The increase was primarily fueled by the energy products category, which saw an impressive 18.5% growth, mainly driven by higher prices. Excluding energy products, exports were up 0.6% in the third quarter. In contrast, imports experienced a decrease of 0.8% in the third quarter after a 0.3% increase in the second quarter.
In real terms, exports increased by 0.6% in the third quarter, following a 0.4% decline in the second quarter. The gain in real exports was mainly attributed to energy products, which contributed the most to the increase. Real imports, however, experienced a 0.4% decline in the third quarter, partially offset by higher imports of motor vehicles and parts, which saw a 7.5% increase.
Revisions to August merchandise export and import data were made, with imports originally reported at $63.8 billion being revised to $64.3 billion, and exports originally reported at $64.6 billion revised to $65.3 billion.