This presentation covers key areas related to the merchandise trande for Canada: Overall Trade Trade Imbalance Energy Automotive Consumer Products Aerospace

1. Trade Analysis – Canada –
February 2016
By: Paul Young, CPA, CGA

2. Disclaimer
• This presentation is one opinion on Supply Chain

3. Paul Young - Presenter
Bio
• CPA/CGA
• 25 years of experience in Academia, Industry and Financial solutions
• Youtube Channel -
https://www.youtube.com/channel/UCAArky1bAXPSuV2NLtUnyLg

4. Agenda
• Overall Trade
• Trade Imbalance
• Energy
• Automotive
• Consumer Products
• Aerospace

5. Summary
• The monthly deterioration in the trade deficit was due to payback on
strong numbers the month before and leaves a strong quarter intact so
far. Exports fell 5.6% m/m in value terms but volumes were down by 2.2%
implying that more of the adjustment was due to weaker prices which
makes this aspect of the details less bothersome than the headline.
Imports also fell (-2.6% m/m) with volumes down 1.2% so prices also
played a significant role here.
• Canada is still tracking big upside to net trade in Q1 with export volumes
up 15% q/q at a seasonally adjusted annualized rate, and import volumes
up a milder 4% q/q SAAR. These figures assume flat readings in March in
order to focus on the effects of the Q4 hand-off and two-thirds of the
quarter so far. So February was payback on January's surge, leaving Q1
positive in terms of net trade contributions to GDP growth. Recall that
export volumes had jumped by about 6% over the prior two months and
gave back less than half that in February, while import volumes gave back
just under half of the gain over the prior two months.

6. Summary

7. Trade Imbalance

8. Energy Sector
• The drop in imports was also led by the energy sector, with imports
down 30% to the lowest level since September 2003. Volumes played
a larger role, down 21%, as eastern refineries have increased their
consumption of domestic oil. Source CNBC - April 5, 2016

9. Automotive
• Auto exports dipped by over 4% in February, and even if we think that US autos sales will regain some of their strength after some of the
recent anemic figures, it will be hard for Canada to ramp up exports and production without added investment in the sector. At 46% year-on-
year, the current annual gain in autos is likely to decelerate in the months ahead, meaning that other categories will have to drive further
improvement in the export tally.

10. Consumer Products
• Consumer goods is one area that the cheaper loonie can help Canada win market share longer term. But in February the
category gave up some of its recent gains. Indeed, the 14% drop accounted for roughly $1 bn in the overall deterioration.
Still, the annual gain here stands at 16%, and there’s reason to believe there could be more strength ahead

11. Forestry
• Healthy Housing Sector

12. Aerospace
• Higher exports of aircraft and other transportation equipment and
parts.