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January 2015 IMTS: What’s one to make of conflicting Canadian trade reports?

Chart 2 Trade Balance Statcan

Statscan’s January 2015 Canadian International Merchandise Trade Statistics (IMTS) report released today read about as badly as such a report could. To put the January results into historical perspective, it notes: “Canada’s merchandise trade deficit widened from $1.2 billion in December to $2.5 billion in January, the largest since the record $2.9 billion deficit in July 2012.” Further: “Canada’s trade surplus with the United States narrowed from $2.2 billion in December to $1.2 billion in January, the lowest surplus since 1992.”

Why, it almost seems like it was just yesterday that the virtues of export-led economic growth were being touted…

Chart 2 Canada Net Exports BMO

Actually, it was two days ago BMO Financial’s AM Charts March 4 ,2015 daily brief included a note, captioned Canadian Exports: Can’t Ask for Much More, that stated: “the BoC can’t complain that exports aren’t carrying the growth baton. Look for that trend to continue in 2015 as
a weaker dollar and firming U.S. growth help.”

So how does one account for the glaring discrepancy?

The Statscan IMTS report, which includes the first chart above, strictly looks at international merchandise trade, Except for a few positive months in 2011 and early last year, it’s pretty much been negative for the last 5 years. The bump early last year coincided with a period during which the Canadian dollar had started to slide prior to the precipitous plummet in oil prices.

Statscan’s Q4 and December Canadian economic accounts report was released just three days prior to its IMTS report. The economic accounts reports looks at demand, including info on international trade of both goods and services. The latest report noted a marked drop in economic growth stemming from the oil price drop:  seasonally-adjusted Q4 growth of 0.6 percent was a significant decline from Q2 growth of 0.9 percent (preliminary results, likely to be further revised down).

The economic accounts seasonally-adjusted trade data appear to show the same trend as the IMTS report did: Canadian exports rose during the brief period in early 2014 when the loonie was lower (than its historcal height in recent years) but oil prices were still relatively stable. The plunge in oil prices starting mid-year that coincided with a marked drop in Canada’s petrodollar significantly gave back those gains. The consistency between the two reports isn’t surprising, since services make up a relatively small share of Canadian international trade.

So how/why do the Statcan and BMO charts showing net exports appear to be markedly different? BMO’s chart shows annualised net exports and presents them as a share of GDP; strong export growth in early 2014 is rolled in with relatively weaker economic growth over the entire year to suggest a trend that should reasonably be expected to “continue in(to) 2015”.

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Note to readers

On August 12, 2013,  the Economic Justice site went down and some of its data was lost (incredibly unreliable x10hosting). We apologise for any errors and broken links as work restoring the site continues, and thank you for your patience.

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2011 NHS: Update on community-level data and data quality

It was just brought to our attention that Statistics Canada has quietly released the 2011 National Household Survey (NHS) data at the census tract (CT) level. As previously noted, only data at the census subdivision (CSD) level was made available at the time of the first major 2011 NHS release back in May. (The 2006 2B Census data for both levels of geography was released at the same time back in 2007.) No information has been provided as to whether/when the 2011 NHS data at the dissemination area (DA) level will be made available.

So good news for community-level data users. Sort of. Maybe… not.

Different geographies

Before jumping ahead, it may be worthwhile to provide a brief overview of the three major sub-provincial levels of geography.

Census subdivision (CSD)
Refers to a municipality or equivalent, such as an Indian reserve. Its size can vary widely in terms of both geography and population. The scope of coverage is all of Canada. There were 5253 CSDs in the 2011 Census. Of these, 1813 were suppressed from the 2011 National Household Survey, most because of low data quality owing to a high global non-response rate (GNR).

Census tract (CT)
Refers to a smaller geographic unit, typically covering a number of blocks or a territory bordered by major roadways. Its size is more consistent than a CSD, typically covering a population of roughly 2,500 to 8,000 people. The scope of coverage is limited to Canada’s major urban centres, also known as census metropolitan area (CMA) or census agglomeration (CA), where 2/3 of Canadians reside. There were a total of 5452 CTs in Canada’s 48 major urban centres. Of these, only 168 were suppressed from the 2011 National Household Survey, most because of low data quality owing to a high GNR.

Dissemination area (DA)
Refers to a small geographic unit, typically a neighbourhood covering a few blocks. It typically covers a population of roughly 400 to 700 people. The scope of coverage is all of Canada. There were 56,204 DAs in the 2011 Census. At the time of writing, no information regarding DA data suppression for the 2011 NHS was available.

Different data quality standards

Given the change from the mandatory long-form Census to the voluntary NHS, the number of suppressions due to non-response are far less than expected. Only a third of CSDs  were suppressed and practically no CTs were suppressed. Seems too good to be true.

Because it’s not (true). On closer inspection, it’s obvious why. Statistics Canada changed the maximum GNR threshold from 25 percent, used for previous long and short-form Census (including the 2011 Census), to 50 percent for the 2011 NHS.

Using the previous GNR threshold, data for most CSDs (4259, or 81 percent of them) and most CTs (3688, or 68 percent of them) would not have been fit to publish.

Recommendation

Short of simply refusing to use the data, analysts and researchers may wish to first review whether data for a specific area they wish to look at meets the previous data quality standard. This will not ensure the data is comparable, as Statistics Canada has made other changes that also effectively lowered data quality even further. But it’s the best one can hope for given the circumstances.

 

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…and on the personal debt side,1990-2008

http://economicjustice.ca/employment/and-on-the-personal-debt-side-1990-2008/

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…and on the expenditure side,1990-2008

Gross domestic product, expenditure-based

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Canadian workers’ wages declined as corporations’ profits rose,1990-2008

Gross domestic product, income-based