Canada's merchandise exports rose 9.7% to $37.8 billion in December, led by a 16.5% gain in volumes of energy products. Export volumes, up 6.6%, increased in most sectors. Prices rose 2.9%. Both volumes and prices have risen in 8 of the past 12 months.
Energy products accounted for over half the growth in the value of exports, followed by industrial goods and materials, which reached a record high. Notable increases were also recorded in exports of machinery and equipment, agricultural and fishing products as well as forestry products.
The value of imports edged up 0.7% to $34.8 billion. Import prices rose 0.4%, following four months of decline, while volumes increased 0.3%.
All import sectors except other consumer goods posted gains in December. The main sources of growth were energy products, agricultural and fishing products as well as automotive products.
As a result, Canada's trade balance with the world went from a deficit of $115 million in November to a surplus of $3.0 billion in December, the first trade surplus since February 2010.
On the strength of energy products, exports to the United States rose 10.8% to $26.7 billion, the highest value since November 2008, while imports were up 2.3%. Consequently, Canada's trade surplus with the United States increased from $3.0 billion in November to $5.1 billion in December, the largest trade surplus since October 2008.
Exports to countries other than the United States increased 7.3%, the sixth consecutive monthly gain, while imports declined 1.9%. Canada's trade deficit with countries other than the United States declined from $3.1 billion in November to $2.1 billion in December.
Higher volumes of energy products boost exports
Energy products exports rose 25.1% to $8.6 billion, the third consecutive monthly gain, with volumes accounting for almost two-thirds of the increase. Widespread gains throughout the sector were led by exports of crude petroleum, which increased 24.2% to $5.0 billion, the highest level since December 2009. Exports of petroleum and coal products also contributed to the gain, as production resumed at some refineries following maintenance work.
Exports of industrial goods and materials increased 7.0% to a record high of $10.3 billion, as exports of precious metals and copper ores reached unprecedented levels. Prices in the sector rose 4.5%, while volumes increased 2.4%. Exports of precious metals rose 25.8% during the month and have more than doubled since January 2010. Exports of nickel ores and copper ores also increased in December, following large declines in November.
Exports of machinery and equipment increased 8.2% to $6.9 billion, as volumes rose 8.6%. Exports of aircraft, engines and parts accounted for over three-quarters of the sector's gain.
Exports of agricultural and fishing products increased 7.6% to $3.5 billion. Gains throughout the sector were led by higher exports of wheat, which have been rising for five consecutive months. Wheat prices have been trending upwards since April 2010.
Forestry products exports rose 9.7% to $2.0 billion, as volumes increased 10.8%. Exports of wood pulp and other wood products grew to $621 million in December, the highest value since August 2007, reflecting higher demand from China.
Other consumer goods moderate the growth in imports
Imports of energy products increased 3.5% to $3.3 billion in December, the result of higher prices. Imports of crude petroleum grew 18.6%, following the completion of maintenance work in some refineries. Imports of coal and other related products, namely natural gas, declined after a strong gain in November.
After three consecutive months of decreases, imports of agricultural and fishing products rose 3.5% to a record high of $2.6 billion. The growth in the sector was led by higher imports of crude vegetable products. In contrast, imports of sugar and sugar preparations fell during the month.
Imports of automotive products increased 0.8% to $5.4 billion, as volumes rose. The gain was the result of higher imports of motor vehicle parts, as production resumed following some plant shutdowns in November.
Imports of other consumer goods decreased 1.7% to $4.9 billion. Imports of miscellaneous end products, which include medicinal and pharmaceutical products, led the decline.