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Merchandise Trade Release Notes – May 2015

Merchandise exports fell for the fifth consecutive month in May, adding to the evidence that the Canadian economy fell into recession in the first half of 2015. Driven down by lower traded volumes of fabricated metals, non-metallic mineral products and rail rolling stock, total goods exports fell 0.6 per cent from a revised total of $42.3 billion in April to $42.0 billion in May. Exports are now at their lowest levels since last January.

Canadian Trade Summary
  Mar-15 Apr-15 May-15
Value ($billions)
Exports 42.4 42.3 42.0
Imports 46.0 45.2 45.3
Trade Balance -3.6 -3.0 -3.3
       
Percentage change
Export prices -1.7 -1.5 0.8
Export volumes 2.0 0.1 -2.5
Import prices 0.5 -1.1 0.2
Import volumes 3.0 -0.7 0.3

The decline in exports, combined with a 0.2 per cent increase in imports, widened Canada’s trade deficit even further. The trade deficit climbed from $3.0 billion in April to $3.3 billion in May – the second largest monthly shortfall on record, behind only March 2015 when imports exceeded exports by $3.6 billion.

On the whole, Canadian exports from January through May 2015 are down 2.1 per cent overall compared to the first five months of 2014. For their part, imports have risen by 5.5 per cent over the same period.

Unlike nearly every month since last fall, the decline in exports in May was not the result of the impact of lower oil prices, but instead was spread across a wide range of industries. As noted above, fabricated metals, rail stock and non-metallic minerals were among the products to see the largest decrease in exports – a symptom of slower-than-expected business investment and construction activity in the US and abroad. Seafood products exports also fell sharply in May, as did foreign sales electronics and electrical equipment. Lower prices also took a bite out of forest products exports.

On the other hand, exports of aerospace products and motor vehicles were both higher in May. Aerospace exports jumped 10.3 per cent, while foreign sales of motor vehicles and parts were 2.6 per cent higher. Pharmaceutical products exports also were up sharply as production volumes recovered from a temporary drop in April.

Energy exports were up for the second month in a row in May as higher crude oil prices drove a 1.3 per cent gain for the month. However, the news was not all good for energy exports. Crude oil volumes fell sharply in May, partly because of the impact of forest fires on oil extraction in Alberta, and partly because of lower demand brought about by continued high production levels and crude oil stockpiles in the US.

On a provincial basis, the three Maritime provinces all posted strong export gains, led by New Brunswick, where monthly shipments jumped nearly 19 per cent. However, those increases were not enough to overcome weakness in other provinces. In particular, exports from Alberta were down 5.7 per cent, while Saskatchewan (-2.9 per cent) and Ontario (-1.3 per cent) were lower as well.      

On the import side, sales of foreign goods into Canada were up in seven of the eleven major product categories. Leading the way were higher imports of consumer goods (up 2.3 per cent), metal products (5.1 per cent higher) and chemicals, plastics and rubber products. On the other end of the spectrum, there was a sharp decline in imports of aerospace equipment, and machinery and equipment into Canada in May.

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