Canada’s Trade Surplus Falls to 2022-Low on Oil Price Drop

After hitting records in June on surging oil prices, exports have now dropped sharply for two second consecutive months as energy prices fell. Total export shipments were down 2.9% in August after a 3.7% decline in July. It represents the biggest two-month drop in the value of shipments since the depths of the pandemic.

The trade numbers add to a recent string of data — including a stalled labor market — that suggest the nation’s economy will struggle to grow by much in the second half of this year, amid slowing global growth and rising interest rates.

Canada had benefited from surging oil prices earlier this year, which helped the nation swing into recurring surpluses for the first time since 2014.

The drop in exports extended beyond energy, however, with seven of 11 subsectors posting declines. Excluding energy products, total exports were down 1.7%. In volume terms, exports fell 1.3%.

Imports, too, recorded a second consecutive monthly decline, reflecting weak activity in the North American car industry. The value of goods purchased from abroad fell 1.7% in August, following a 0.7% drop in July. In volume terms, imports were down 0.7%.

Monthly exports of services rose 0.3% to C$12.6 billion, while service imports rose 2.1% to C$14.5 billion.