Monthly trade report - November 2024

Highlights

• Canada's exports and imports of goods and services grew for the second consecutive month in November. Export growth (+1.7%) slightly outpaced import growth (+1.4%).
• Goods exports increased by 2.2%, but this increase was largely led by higher prices. Services exports fell slightly (-0.2%) in November.
• Goods imports experienced broad-based gains, increasing 1.8%, which was primarily volume driven. On the other hand, services imports fell by 0.1% in November.
• Goods trade with the U.S. grew in November, with exports up 6.8% and imports up 4.1%. As a result of exports growing faster than imports, Canada’s goods surplus with the U.S. widened to $8.2 billion in November.

Table 1: Canada’s trade performance

Figure 1: Canada’s monthly trade performance

Industry view - Exports

The increase in exports in November was broad based, occurring in 9 out of 11 product groups. Metal and non-metallic minerals experienced the largest overall increase (10.5%) thanks to higher exports of copper ores and concentrates to Asia.

For the second consecutive month, exports of consumer goods rose in November (4.4%), due to higher exports of pharmaceutical products. In November, exports of metal and non-metallic mineral products increased by 3.8%. This growth was largely supported by exports of unwrought gold, silver, platinum group metals and their alloys, which rose 16.7% to a record $4.9 billion.

Overall services exports declined 0.2% in November, with only 2 of the 4 service sectors posting growth. The largest decrease was in commercial services (-1.8%), which fell for the second month in a row. On the other hand, travel services exports grew 3.3%, mainly due to increased spending by U.S. resident travellers in Canada.

Figure 2: Exports by industry and sector

Industry view - Imports

Imports growth was also broad based, with 9 out of 11 products sections posting gains. Imports of forestry products (5.9%) and aircraft & other transportation equipment (5.8%) rose in November after two consecutive months of decline. The increase in total goods imports was also driven by imports of consumer goods (3.8%), chemical, plastic & rubber products (4.3%), industrial machinery, equipment and parts (3.0%) and metal and non-metallic mineral products (3.2%).

Imports grew in 3 out of 4 service sectors but fell overall due to a decline in the imports of commercial services (-1.8%). Despite the overall service imports decline, transportation services grew 3.6% due to higher payments for maritime transportation services for goods entering Canada. Imports of government services also rose, increasing for the third month in November (1.9%).

Figure 3: Imports by industry and sector

Global markets

Exports of goods to the U.S. increased 6.8% due to higher exports of pharmaceutical products (medicaments), exports of miscellaneous goods and supplies (battery packs for electric vehicles) and higher transfers of gold. Imports from the U.S. also grew, by 4.1%. Nevertheless, the trade surplus widened from $6.6 billion in October to $8.2 billion in November.

Exports to countries other than the U.S. fell in November (-10.3%), weighed down by lower exports of nickel to Norway and of unwrought gold to Hong Kong. Imports from countries other than the U.S. also fell in November (-1.9%).

Canada’s trade deficit with countries other than the U.S. widened from $7.2 billion in October to $8.5 billion in November.

Figure 4: Goods trade by main markets

Prices and volumes

Export growth was primarily price driven, with export prices growing at a faster rate than export volumes (+1.6% vs +0.6%, respectively). Imports experienced the opposite effect, with increases in import volumes (+1.4%) outpacing increases in import prices (+0.4%).

The Canadian dollar continued its downward trend, depreciating 1.6% to reach 71.6 US cents in November. Since its recent peak in September, the Canadian dollar has depreciated by 3.1%.

Although November price data for Western Canada Select (WCS), Canada’s benchmark crude oil price, has not yet been released, Statistics Canada reports that crude oil prices remained relatively stable in November. This stability supported Canadian crude oil export prices and marked a departure from the seasonal declines in crude oil prices that are usually observed during the month.

Figure 5: Goods trade

Figure 6: Exchange rate & oil prices

What to watch

• By the end of 2024, the USD has strengthened against several major currencies, including the Canadian dollar (CAD). The CAD traded at its lowest rate (0.6937 USD/CAD) since mid-2020 in late December. A weak Canada dollar enhances the competitiveness of Canadian exports, while raising the cost of imports for Canadian businesses and consumers.
• The Canadian economy grew 0.3% in the third quarter of 2024 and the IMF forecasts real GDP growth of 2.4% in 2025, higher than forecasts for its main trading partners, the US (2.2%), Japan (1.1%), Mexico (1.3%), Germany (0.8%) and the UK (1.5%), excluding China (4.5%).
• Canadian manufacturing activity grew for a 4th consecutive month, with S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) reaching 52.2 in December. A PMI score above 50 indicates improving business conditions, while a score below 50 indicates deteriorating business conditions. This growth is likely supported by U.S. buyers stockpiling inventories ahead of potential tariffs as well as a weak Canadian dollar. Meanwhile, declines in global and U.S. manufacturing activity were reported last month.

Table 2: Trade by industry sector

Table 3: Goods trade by main markets