Trade deficit narrowed in May as exports rose and imports fell again

Marco Green
July 3, 2020

Total exports rose 6.7 per cent in May to reach $34.6 billion, however Statistics Canada noted that they were down 34.1 per cent compared with a year ago.

Statistics Canada said Thursday that Canada's deficit in the global trade of merchandise goods shrank in May to 677 million Canadian dollars ($496.8 million) from a revised C$4.27 billion in the previous month. The median estimate of economists surveyed by Bloomberg had called for a widening to US$53.2 billion.

The 16.9% drop in imports to $17 billion from January to May came as a result of a fall in all imports except cereals, the agency said.

The coronavirus pandemic caused the USA trade deficit to widen in May as both exports and imports fell, the Commerce Department said Thursday.

Exports to Canada, the top destination for Wisconsin products, have declined 16.8% year-to-date to $2.41 billion, including a 31% decline in May.

"Looks like the worst is behind us, there's a small rebound and it's broadly based, which is good news", said Peter Hall, chief economist at Export Development Canada.

Canada has been hit doubly hard by the both the pandemic-related shutdowns and collapse in energy prices. Shipments of industrial supplies, capital goods and autos all fell, while consumer-goods exports picked up slightly.

Despite the monthly increase, exports of motor vehicles and parts were down by nearly 80% compared with May 2019, StatsCan said, while the monthly value for crude oil exports was still about one-third of what it was in January. Just three states - Nevada, Alaska and Hawaii - saw year-over-year increases in May.

Imports slipped 0.9 percent to 199.1 billion US dollars, the lowest since July 2010.

Combined, the value of USA exports and imports decreased to US$343.6 billion, the lowest since April 2010. Total trade remains 29% below February's level. "And, if the resurgence of infections south of the border holds back the U.S. recovery, Canadian exporters could find that road to be a very bumpy one in the coming months".

Travel restrictions weighed on exports of services, which fell to 54.5 billion USA dollars, the lowest since December 2011.

Other reports by Click Lancashire

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