Canada’s merchandise trade balance had the fourth consecutive month of surplus in September as global supply chain bottlenecks debilitated the automotive industry, according to data released by Statistics Canada on Thursday.
Although the surplus widened, the falling of both exports by 2.3% and imports by 3% reflect the pressure that supply chain bottlenecks are having on trade flows.
International trade in motor vehicles dropped dramatically, with exports falling by 17.9% and imports declining by 13.6%. The automotive microchip shortage has severely hurt Canada’s car industry, despite soaring demand from buyers.
The automotive industry, which has borne the brunt of the microchip shortage, will recover next year, but the impact of its downturn on trade will be felt for several months.
Energy exports climbed by 6.1% as the Canadian energy industry capitalized on the global energy crunch, which had led to widespread shortages from China to the United States.
Canada’s trade surplus with the U.S. climbed to the highest since 2008 even as overall cross-border trade declined. The decline is most likely a result of supply chain bottlenecks and high prices deterring production. For this reason, higher trade volume is expected once supply catches up with demand.
