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.
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.