Mexico gained market share in imports of products to Canada in 2023, having a better dynamism than the United States and China.

Canadian imports from Mexico grew at a year-on-year rate of 9% to US$34.127 billion, according to Statistics Canada.

In contrast, Canadian purchases from the United States fell 1% to $277.111 billion, and those from China fell 14% to $66.077 billion.

Product imports to Canada range from automobiles, food and auto parts, to telephones, clothing and computers.

From around the world, Canadian imports of goods declined 2% to $558.685 million.

Thus, the United States increased its market share from 49.2% in 2022 to 49.6% in 2023 in these Canadian purchases, while China reduced this coverage from 13.5% to 11.8%, respectively.

In turn, Mexico’s market share increased from 5.5% to 6.1% in the same comparison.

Market share

According to Coface, Canadian economic activity slowed in 2023 as the impact of the Bank of Canada’s aggressive rate hike campaign began and should remain weak in 2024, as financial conditions are likely to remain tight. 

Households, whose debt represents about 182% of disposable income, are particularly sensitive to interest rate increases and are likely to continue to limit their discretionary spending. 

Interest rates

As a result, Coface considers it likely that the contribution of consumption (55% of GDP), already weak, will remain mediocre. Demographic growth, driven mainly by immigration, is expected to remain strong, which will provide some support to demand. 

However, this demographic dynamism is accompanied by challenges, particularly in terms of housing. 

High interest rates should limit the contribution of business investment spending. While inflation should continue to moderate and is expected to return to the Bank of Canada’s target range (1-3%) in 2024, the Bank of Canada should begin a cycle of rate cuts later this year. 

The top Canadian imports from Mexico in 2023 were: autos ($5.184 billion), goods vehicles ($5.774 billion), auto parts ($1.974 billion), computers ($1.397 billion), and tractors ($1.367 billion).