High energy, gold exports help narrow Canada’s trade deficit

Canada’s merchandise trade deficit narrowed on higher energy and gold exports.

The country recorded a C$1.05 billion trade deficit in April, from C$1.99 billion a month earlier, Statistics Canada reported Thursday in Ottawa. That’s in line with the median estimate of economists in a Bloomberg survey.

Total exports rose 2.6% in April, while imports increased 1.1%. In volume terms, exports were up 1.7% and imports edged down 0.2%.

Exports of energy products — including natural gas, crude oil and propane — jumped the most that month. Unwrought gold exports also rose, with the increase primarily attributable to higher prices amid elevated safe haven demand driven by geopolitical risk in the Middle East and elevated purchasing from investors and central banks.

Imports of motor vehicles and parts posted the largest increase in April and marked the third straight monthly gain. Higher shipments of sport utility vehicles and light trucks drove the increase, which coincided with higher production in the US in March and April.

Following a 17.7% import decline in the transportation equipment category in March, driven by lower aircraft imports, the sector rebounded 23.7% on higher imports of ships in April. Specifically, Canada received several ships including a ferry from China that is set to run between Newfoundland and Nova Scotia.

April’s decrease in import volumes was driven by consumer goods, mainly clothing, footwear and accessories, suggesting weaker consumer demand heading into the second quarter.