The goods-trade surplus of Canada with the rest of the world narrowed in November. This was driven by a rebound in imports, primarily due to a jump in shipments of energy products. It is worth noting that exports fell for the first time since June.

According to Statistics Canada, the country recorded a fourth consecutive monthly merchandise-trade surplus of 1.57 billion Canadian dollars (approximately $1.17 billion). However, this fell short of economists' expectations of a surplus of C$2 billion. It should be mentioned that October's surplus was revised higher by $230 million to reach $3.2 billion.

In the latest month, merchandise exports decreased by 0.6% to C$65.74 billion. This decline was mainly attributed to decreased movements of mineral products and air aircraft, as well as other transportation equipment and parts. Nevertheless, excluding these components, exports actually increased by 1.0% in November.

Within the energy sector, Canadian exports of energy products saw a 1.3% increase during the month.

However, exports to countries other than the United States registered a decline of 4.2% in November. This was primarily due to a drop in exports of other transport equipment to Saudi Arabia and unwrought gold to Switzerland. On the other hand, exports to the U.S. experienced a modest increase of 0.4% compared to the previous month.

In terms of volume, overall exports around the globe dipped slightly by 0.1% from October.

On the imports side, purchases from abroad rebounded strongly in November, rising by 1.9% to reach C$64.17 billion. This recovery came after a sharp pullback in October. In volume terms, November imports rose by 1.6%.

Canada's Imports of Energy Products Rebound in November

Canada experienced a significant rebound in its imports of energy products in November, with a notable increase of 11.6%. This growth follows two consecutive months of declines and was primarily driven by the shipment of uranium from Kazakhstan. Interestingly, there were no significant imports of uranium recorded between April and October.

Another contributing factor to November's rise in imports was the increased export of gasoline and aviation fuel from the United States. These exports coincided with outages reported by Canadian refineries during the fall season, allowing the U.S. to fill the gap in supply.

Imports of goods from the U.S. also saw a modest increase of 1.7%. As a result, Canada maintained a trade surplus with its neighboring country, amounting to C$11.69 billion. However, this surplus narrowed slightly compared to October's figure of C$12.15 billion.

Conversely, Canada's trade deficit with countries other than the U.S. widened in November, reaching approximately C$10.1 billion. This was an increase from the previous month's deficit of C$9.0 billion.

When considering both goods and services, Canadian exports experienced a slight decline of 0.3%. On the other hand, imports rose by 1.5%. Consequently, Canada's overall trade surplus, incorporating both goods and services, saw a significant decrease to just C$594 million in November. This is a notable decline from October's surplus of C$2.04 billion.

The recent cooling of economic output in Canada can be attributed to high interest rates, which have resulted in weaker growth. The central bank anticipates a period of slower growth before experiencing an upturn towards the end of 2024. In the third quarter of this year, Canada's gross domestic product contracted on an annualized basis due to reduced international exports and a slower inventory buildup by businesses.

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