Supply Chain North America Jan 16 and Feb 16

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

DisclaimerThis presentation is one opinion on Supply Chain

Paul Young - Presenter

BioCPA/CGA25 years of experience in Academia, Industry and Financial solutionsYoutube Channel - https://www.youtube.com/channel/UCAArky1bAXPSuV2NLtUnyLg

AgendaOverall TradeTrade ImbalanceEnergyAutomotiveConsumer ProductsAerospace

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SummaryThe 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.

Scotiabank5

Summary

Stats Canada 6

Trade Imbalance

Stats Canada7

Energy SectorThe 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

TD Economics / http://www.cnbc.com/2016/04/05/kuwaits-opec-governor-says-signs-point-to-output-freeze.html/Baker Hughes8

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.

Cibc/Scotiabank

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Consumer ProductsConsumer 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 theres reason to believe there could be more strength ahead

Scotia Bank/http://www5.statcan.gc.ca/cansim/a21?NOSEC=false&MBR%5B%27SA%27%5D=1&initialViewPeriodNumber=0&whenConvertingFrequency=USE_CALENDAR_YEAR&action%3Aa21=Apply&p1=1&eyear=2015&outputFrequency=ANNUAL_SUM&exporterId=TABBED_TABLE_HTML_TIME_AS_COLUMN&MBR%5B%27GEO%27%5D=1&MBR%5B%27TRADE%27%5D=1*2&smonth=1&lang=eng&syear=2011&id=2280059&MBR%5B%27BASIS%27%5D=1&emonth=12&stByVal=2&accessible=false&retrLang=eng&manipulationOption=YEAR_TO_DATE_SUMS&MBR%5B%27NAPCS%27%5D=1*3.8.2*2.2.3.2.2.2*2.6.4*2.8.2.2.2*2.5.4*2.2.2.6*2.9*2.2.2.4*2.2.2.3*2.3.4*2.11.4.3.2.2.4*2.2*2

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ForestryHealthy Housing Sector

CMC, Bureau of Economics11

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

Montreal gazette

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