Imports, exports keep falling due to energy, automotive

OTTAWA — Declines in the energy sector in May, was one of a handful of factors leading to a fourth drop in exports in five months. But merchandise imports decreased at a rate higher than that of exports, resulting in an increase in Canada’s merchandise trade surplus, reports Stats Canada.

Exports decreased 0.2 percent to $37.0 billion as four export sectors (energy products, agricultural and fishing products, forestry products, and machinery and equipment) posted declines that more than offset the gains in industrial goods and materials, automotive products, and other consumer goods.

This year’s slump in merchandise exports follows a sharply rising trend that had started in November 2004 and ended in December 2005. The behavior of energy exports, largely due to the volatility in prices, says the agency, played a significant role on the movements of total exports in recent months. If energy exports were excluded, total exports would have advanced 0.9 percent in May.

Imports, which fell 0.8 percent to $32.9 billion in May, declined for the third time in five months this year. This follows a rising trend that also began in August 2003.

The country’s total merchandise trade surplus advanced from a revised $3.9 billion in April to $4.1 billion, according to Stats Can.

Energy products, agricultural and fishing pull total exports down:

After increasing by 7.2 percent in April, energy product exports fell 4.6 percent to $7.0 billion in May. The drop was the result of declines in both volume and prices. Crude petroleum exports fell 2.8 percent, following a 12.6 percent gain in April.

In the wake of an 8.7 percent drop in prices in May, natural gas exports declined for a fifth consecutive month, dropping 4.6 percent. Other energy products, which include refined petroleum and coal products, electricity, and coal and other bituminous substances, fell 7.5 percent.

Meanwhile, exports of agricultural and fishing products declined 3.9 percent to $2.5 billion, after gains in both March and April. The main contributors to the decline were wheat (-31.4%) and live animals (-30.8%) — the latter due mainly to lower demand from the United States.

Automotive prods lost the ground made up in
March and April by falling by 5.1 percent

Exports of forestry products also declined for a fourth consecutive month in May, down 1.9 percent to $2.8 billion. Within the commodity group, lumber and sawmill products fell 4.4 percent.

Automotive imports and energy products behind the decline:

Canada’s merchandise imports have been trending upward since August 2003, says Stats Can. However, declines in automotive products, energy products, forestry products, and other consumer goods more than offset those gains, pulling total imports down.

After rising a cumulative 5.7 percent in March and April, automotive products imports fell 5.1 percent to $6.4 billion in May. This came in the wake of a 0.7 percent drop in new vehicle sales the month before. Motor vehicle parts, the largest component of the sector, fell 4.8 percent, continuing its declining trend since October 2005. Imports of passenger autos and chassis fell 4.6 percent, and trucks and other motor vehicles dropped 6.5 percent. The last two sub-sectors had been generally rising since August 2003.

Imports of energy products dropped 4.4 percent to $2.9 billion after rising about 24 percent in April. The decrease was the result of a large drop in volume, partly compensated by a rise in prices. Imports of crude petroleum fell 12.4%, while other energy products, which include refined petroleum, natural gas and coal, were up for the third consecutive month, rising 8.4% in May.

Still, Canadians imported $9.3 billion in machinery and equipment in May, up 1.9 percent from April when imports dropped 3.4 percent. The largest contributors to the sector’s gains were industrial and agricultural machinery (+12.0%), other industrial machinery (+14.9%), engines, turbines and motors (+27.2%), and drilling and mining machinery (+28.5%). May marked large increases in imports of machinery and equipment by the oil sands industry.