Canada Falls Back Into $1.4 Billion Trade Deficit in May Amid Higher Imports

Canada’s trade balance jumped from a revised surplus of $462 million to a deficit of $1.4 billion in May, as merchandise exports declined 1.6% and imports rose 2.1%.

Following a decline of 4.1% in April, total imports rose to $50.9 billion, with increases being noted across 7 of the 11 product sections. Imports of metal and non-metallic mineral products surged 17.7% in May, to a new record-high of $5.3 billion. Consumer product imports were also 4.8% higher, largely due to a 8.2% jump in the imports of pharmaceutical and medicinal products.

On the other hand, Canada’s exports fell to $49.5 billion in May, as declines were noted across 8 of the 11 product categories. The majority of the decline stemmed from an 8.8% drop in consumer goods exports, of which seafood products posted a 46.5% decrease. Similarly, exports of motor vehicles and parts also fell 5.8% in May, marking the seventh decline over the past eight months, as automakers around the world were forced to reduce production amid the global semiconductor shortage.

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Partially offsetting the decline was an 8.9% increase in forestry products and building and packaging materials exports, which rose to a record $5.2 billion in May. The increase was led by elevated lumber exports, which rose 19.6% amid higher prices.

In the meantime, Canada’s trade deficit with non-US countries widened even further in May, from $6.1 billion in April to a record $7.5 billion. Imports from the US rose 0.1% in May, while exports to the neighbouring country dropped 1.1%. As a result, Canada’s trade surplus with the US declined from $6.6 billion in April to $6.1 billion in May.

Information for this briefing was found via Statistics Canada. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.