Canadian trade balance likely to have remained unchanged in November

The Canadian international trade balance data for the month of November is set to release tomorrow. According to a TD Economics research report, the trade balance is likely to have remained roughly unchanged at a CAD 1.1 billion deficit in the month. Export activity is expected to advance from a recovery in motor vehicle production that had been weighed down by U.S. factory shutdowns. U.S. auto shipments bounced back entirely in November, but the Canadian recovery would be constrained by the scheduled winddown of GM’s Oshawa facility.

Meanwhile, a nominal tailwind from increased crude oil prices would be countered by transportation headwinds, as shutdowns to the Keystone Pipeline dragged on export capacity for part of the month.

“The CN Rail strike also introduces some downside risk to exports, especially in the agricultural sector. Agricultural exports are down 17 percent over the last two months, but the combination of the CN strike and ongoing geopolitical tensions with China will limit any rebound. On the other side of the ledger, a return to normal US auto production will provide a tailwind to imports”, added TD Economics.