Canada’s trade surplus narrows on pullback in energy prices

Canada’s merchandise trade surplus narrowed in July, largely driven by the decline in oil and natural gas prices.

The surplus fell to C$4.1 billion ($3.1 billion), down from a revised C$4.9 billion in June, Statistics Canada reported Wednesday from Ottawa. Economists were anticipating a C$3.78 billion surplus for July.

Exports decreased 2.8% for the month, while imports were down 1.8%. That’s the first monthly decrease in exports this year and the first drop in imports since January.

Canada has benefited from surging oil prices earlier this year, which helped the nation swing into recurring surpluses for the first time since 2014. Canada has seen trade surpluses every month this year, but lower energy prices narrowed the surplus from a 14-year high in June. 

While a sharp decrease in prices drove export values down in July, total exports in volume terms rose 1.7%, the third straight monthly increase. Total imports decreased 1.4% in volume terms.

In July, service exports fell 0.1% to C$12.7 billion, while service imports increased 3.7% to C$14.4 billion.