Canada Posts Trade Surplus of $594M as Global Chip Shortages Disrupt Auto Industry
Canada’s trade balance reverted back to a surplus, as imports fell amid ongoing global supply disruptions, particularly in the auto industry.
According to data published by Statistics Canada on Tuesday, the country’s trade balance rose from a deficit of $1.3 billion to a surplus of $594 million in April. The latest surplus marks the third of its kind this year; however, its value amounted to less than 0.6% of all monthly merchandise trade.
The surplus was largely attributed to a decline in imports, which fell 4.7% to $49.6 billion, following an increase of 6.1% in March. This marked the largest decrease since record declines were noted in April 2020. Motor vehicles and parts aside, imports dropped 1.3%. In the meantime, Canadian exports fell 1% to $50.2 billion, as 6 of the 11 categories noted declines.
Imports of motor vehicles and parts fell 22.1% in April to $6.6 billion, marking the lowest level since February 2012. The ongoing global semiconductor shortage has decimated auto manufacturers worldwide, significantly impacting the supply of vehicles and vehicle parts. Likewise, exports of motor vehicles and parts were down 18.1% in April to $5.5 billion, marking the lowest since January 2014.
Canada’s trade surplus with the US expanded from $4.2 billion to $6.4 billion in April, as imports fell 5.2%, and exports rose 1.4%. Elevated levels of seafood products and softwood lumber exports were mainly responsible for April’s trade surplus with Canada’s southern counterpart.
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.
