Trade deficit tops $1.4 billion in May following April surplus
Canada posted a merchandise trade deficit of $1.4 billion in May compared with a surplus in April as imports rose and exports fell.
Statistics Canada said on July 2 the result followed a revised surplus of $462 million in April compared with an initial reading of a surplus of $594 million.
CIBC senior economist Royce Mendes said economists had expected a second consecutive surplus for the month.
“It was a swing and a miss for Canada’s trade data in May,” Mendes wrote in a report.
“Still, the rise in real imports, particularly for items like industrial machinery and equipment, suggests that domestic demand continues to increase.”
Total imports increased 2.1 per cent to $50.9 billion in May as imports of metal and non-metallic mineral products climbed 17.7 per cent.
Meanwhile, total exports fell 1.6 per cent to $49.5 billion in May.
Exports of consumer goods dropped 8.8 per cent, while exports of motor vehicles and parts fell 5.8 per cent.
Canada’s the trade surplus with the United States fell to $6.1 billion in May compared with $6.6 billion in April, while the trade deficit with the rest of the world rose to a record $7.5 billion in May compared with $6.1 billion in April.
Statistics Canada noted the Canadian dollar posted its largest monthly increase against the U.S. dollar since July 2017 as the average value of the Canadian dollar rose 2.4 cents US compared with the average value in April to 82.5 cents US.
When expressed in U.S. dollars, Statistics Canada said imports rose 5.2 per cent in May and exports increased 1.4 per cent.
In volume terms, imports rose 2.5 per cent in May and exports fell 3.1 per cent.
Statistics Canada also reported the international trade in services deficit rose to $384 million in May compared with $303 million in April as service exports fell 0.1 per cent and service imports rose 0.7 per cent.
Canada’s combined trade balance for goods and services was a deficit of $1.8 billion in May compared with a surplus of $159 million in April.