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Nathan Janzen, senior economist at Royal Bank of Canada, notes that the Canada’s net trade balance held at a $0.1 billion surplus as exports fell 5.1% (and 2.2% excluding price effects), while import volumes dropped a larger 3.6%.

Key Quotes

“The small $0.1 billion surplus was a second consecutive positive balance – but details were soft with exports and imports both declining sharply.   More than half of the 5% plunge in exports was accounted for by lower prices – so export volumes were down less in the month and still up a large 14.9% (annualized) in Q2 as a whole. But a 3.6% drop in June import volumes, including big declines in equipment imports, left imports down 3.4% for the quarter.”

“The monthly trade data is notoriously volatile and revision prone.   And net trade looks on track to potentially add more than four percentage points to Q2 GDP growth.   But softer imports don’t bode so well for underlying domestic demand growth, particularly business investment.”