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Canadian Data: Trade balance is dropping

This morning StatsCan released its June 2011 trade data, and while import track a growing economy (with a strengthening currency), exports tell a different story.  Canada's trade deficit that had grown to $1 billion in May is now $1.6 billion, and in view of the price for natural resources (including energy) over the past two months, I would suggest that Canada has "worse to come" in terms of trade balance.

Exports and imports
(Source: Stats Can)

The usual culprits are to blame;  Energy and automotive (but considering their importance in export trade) this result is hardly surprising.  Exports dropped by 2.2% to $ 36.5 billion.  Import volume rose by 1.9% but there was a nearly identical drop in import prices (its easy to forget that the CAD become very strong in early June -- and that this trend -- peaking at 1.05/0.95 in early July) will reverse throughout the summer.  

One issue because Canada is very dependent on energy import/exports summer months can create false sense of euphoria or doom, summer refinery shutdowns has a huge impact on trade balance (a bit like the aerospace sector that has lumpy sales).  One thing for sure is that trade is showing stabilization in Canada's export picture -- stagnation trends seem to be emerging (maybe that just my imagination...) 

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