Merchandise trade continues to tumble

OTTAWA — Canadian merchandise imports and exports declined in May for the second consecutive month after both reached record levels in March.

According to Stats Canada’s monthly report, exports fell 1.2 percent to $39.9 billion, largely the result of declines in automotive products and, to a lesser extent, in agricultural, fishing, and forestry products.

Imports declined 1.4 percent to $34.1 billion in May, despite robust growth in energy products.

Exports to the U.S. dropped at a sharper rate than imports

Canada’s trade surplus with the U.S. narrowed to $7.8 billion in May from a revised $8.1 billion in April, as exports to Canada’s largest trading partner dropped at a sharper rate than imports.

Elsewhere, the value of imports from countries other than the U.S. declined, as did the value of exports to those destinations.

Since a spike registered in December 2006 and the subsequent more moderate increase in March, exports of automotive products have fallen.

In May, exports for this sector fell 5.8 percent to $6.4 billion, while agricultural and fishing products declined 6.9 percent to $2.8 billion as wheat plunged 34.1 percent, offsetting April’s increase. Exports of live animals also decreased, although live animal exports have been gradually increasing as more countries ratify agreements to accept Canadian cattle since the BSE crisis in 2003.

Meanwhile, forestry products declined 3.8 percent to $2.5 billion as lumber products registered the largest decline — affected by low prices and persistent weakness in the American housing market.

The good news is that energy products edged up 0.6 percent to $7.8 billion as petroleum and coal products rose for the fourth consecutive month, while increased demand for aircraft, engines and parts pushed exports of aircraft and other transportation equipment up 16.7 percent to $2.1 billion, the highest level since February 2002.

Imports Drag Too:

As is routinely the case these days, the auto sector was also largely responsible for a drop in imports — down 5.4 percent in May to $6.5 billion. Motor vehicle parts registered the largest decline (-5.5%), falling to just below the $3-billion mark for the third time since 2001.

Imports of other consumer goods contracted for the second month in a row, declining 5.7 percent to $4.4 billion.

Agricultural and fishing products edged up 0.3 percent, though, to $2.1 billion. The rise was concentrated in imports of fruits and vegetables, as the seasonal demand for fresh fruits and berries was particularly strong.