- Exports and imports of goods both rose 1.5% in September, leaving the goods trade deficit little changed
- Both exports and imports remain below pre-shock (February) levels
- Increase in imports of industrial equipment were positive for near-term business investment
- Exports of services still more than 20% below February levels, imports down a third over that period.
The uneven recovery in Canadian international trade flows continued in September although the pace of improvement in international trade has flattened out after the initial rapid rebound in June and July.
Exports of natural resources were largely above pre-shock levels in September, with the exception of energy exports which remain very soft. Sales of motor vehicles & parts were also back around pre-shock levels. But exports of industrial machinery and aircraft continued to lag. On a more encouraging note, Canadian imports of industrial equipment increased almost 7% in September. That gain counts as a negative for the net trade balance, but is a positive sign that Canadian business investment picked up in the third quarter.
Trade in services continues to lag more substantially. Services exports were down 2.5% from August and were more than 20% below pre-shock February levels. Imports of services were down about a third over that period. Both are being weighed down heavily by travel-related declines, and are unlikely to be reversed significantly with borders still closed to nonessential travel. Tourism-related industries – both international and domestic- will remain a drag on the economic recovery as long as the virus threat remains.
