Quebec: Trade Deficit Widens In December
The National Bank of Canada | Mar 03, 2013 06:18AM ET
The Institut de la statistique du Québec reports that Quebec’s trade deficit widened in December for the first time in four months (top chart). The value of exports fell $281 million (−5.1%) to $5.3 billion and the value of imports fell $18 million (−0.3%) to $7.2 billion. The main contributors to the decline in exports were farm, fish and intermediate food products (−$177 million) and airframes, engines and parts (−$87 million). The decline in imports was due mainly to other metal products (−$98 million), industrial machinery, equipment and parts (−$39 million) and pharmaceutical and medicinal products (−$34 million). In constant 2007 dollars, the trade deficit widened $191 million to $1.24 billion as exports fell $228 million (−4.1%) and imports were down $37 million (-0.6%). Export prices fell 1.0% and import prices rose 0.3%.
OPINION: Too much should not be made of the large December drop in Quebec exports. It was due in large part to reversion of farm products to their 2012 average after exceptional months in October and November. For the quarter, Quebec volume exports were up a vigorous 4.4% to a four-quarter high (middle chart). This showing, combined with a decline of exports in the rest of Canada, helped narrow a gap with the rest of the country that had opened up since the recession. International trade added to Quebec GDP in Q4 after subtracting from it in Q3 (bottom chart). The implications for business investment, however, are less cheerful: imports of industrial machines, equipment and parts were down 17.7% for the quarter and imports of electronic machinery and parts were down 3.6%.
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