U.S. exports: Canada, top destination

U.S. exports maintained Canada as the top destination in 2023, according to statistics released Wednesday by the Census Bureau. 

The United States exported products to the Canadian market with a customs value of $353.235 million in the past year, down 0.9% compared to 2022.

Moving forward, Export Development Canada (EDC) expects Canada’s economy to experience below-trend growth in the first half of 2023. 

In the third quarter, Canadian households spent more than 15% of their disposable income on debt payments as interest rate increases hit their households. 

While EDC expects the Canadian economy to remain fragile early in the year, it does not anticipate a recession or widespread job losses, with annual growth of 0.8 percent. 

In its view, stronger growth in the second half of the year and a stronger global economy will boost growth to 2 percent in 2025.

Thus, Canada’s economy will slow this year as high interest rates continue to weigh on over-indebted households and drag down business spending. 

Weaker external demand will also contribute to Canada’s overall economic outlook.

U.S. Exports

Both countries have a significant trading relationship, with substantial bilateral exports and imports. 

In the U.S., according to EDC, consumers will continue to spend, albeit at a slower pace, as excess savings finally dry up with higher prices and interest rates, and pent-up demand runs its course. 

Also, higher costs are limiting the spending capacity of businesses, which means that the pace of job creation and wage increases will continue to slow. 

Outlook

A weaker consumer, coupled with slower global growth, will soften the U.S. outlook for 2024, generating EDC-estimated growth of only 1.2 percent. 

EDC predicts U.S. activity to pick up in the second half of 2024, bringing growth closer to trend in 2025, 1.8 percent.