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Canada’s Trade Deficit Jumps in May

July 06, 2017

The Conference Board of Canada’s Chief Economist Craig Alexander offers the following perspectives/insights:

Quote

“Improving global economic conditions are helping Canadian exports and net trade should be a positive contributor to economic growth in the second quarter. The jump in the trade deficit in May is likely temporary, as the surge in imports was concentrated in the volatile aircraft imports component,”
—Craig Alexander, Senior Vice-President and Chief Economist, The Conference Board of Canada.

Insights

  • Canada’s trade deficit widened by more than expected in May. Export growth was solid, but was surpassed by a surge in imports. However, the jump in imports is unlikely to be sustained, as it was concentrated in the highly volatile aircraft and transportation sector that posted an increase of 46 per cent.
  • Exports rose by 1.3 per cent in May, but this was outpaced by a 2.4 per cent increase in imports. Consequently, Canada’s merchandise trade deficit climbed to $1.1 billion, close to double the level in April. Canada’s trade surplus with the United States fell in May from $4.8 billion to $3.5 billion, which is noteworthy given the future NAFTA renegotiation talks.
  • Export volumes rose 1.1 per cent, while prices rose 0.2 per cent. The monthly growth in exports was solid and broadly based. The strongest gains were in metal and mineral products, industrial machinery and equipment, and aircraft and transportation products.
  • The volume of imports rose 1.8 per cent, while prices rose 0.6 per cent. The aircraft and transportation equipment sector posted a huge increase in May, which is a monthly blip due to the delivery of a number of aircraft. Energy products had a solid increase.
  • There was a modest upward revision to Statistics Canada’s tracking of both exports and imports in April. 

 


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Photo of Craig Alexander Craig Alexander
Senior Vice-President and Chief Economist

Craig Alexander brings over 19 years of experience in the private sector as an economic and financial forecaster to the position of Senior Vice President and Chief Economist. He oversees the Board’s macro-economic outlook products, custom economic and tourism research.

Follow Craig on Twitter

@CraigA_Eco


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