- Canada's merchandise exports rose 4.1 per cent (month-on-month) in May while imports decreased 0.7 per cent. As a result, Canada's merchandise trade surplus with the world widened from $2.2 billion in April to $ 5.3 billion in May, the largest surplus since August 2008.
- Total exports rose for the fifth consecutive month to $68.4 billion in May. Exports of energy products were up 5.7 per cent to $20.4 billion in May, representing 29.8 per cent of total exports, a record high.
- Following three consecutive monthly increases total imports decreased 0.7 per cent to $63.1 billion. Imports of consumer goods fell 4.7 per cent in May. In recent months, the clothing, footwear, and accessories (-11.3 per cent) product group was the largest contributor to the monthly decrease.
- Exports to the United States continued to rise, increasing 2.4 per cent in May largely driven by higher exports of crude oil. Meanwhile, imports from the United States crept up 0.3 per cent. As a result, Canada's trade surplus with the United States widened from $12.9 billion in April to $14.0 billion in May, another record high.
Supply chains are adjusting to the new normal. The pandemic and its resultant effects on spending patterns and supply chains have altered business’ inventory management and import patterns. The disruptions of normal seasonal buying patterns point to continued swings in trade results in the months ahead.
Recent COVID-19 outbreaks in China might further disrupt supply chains. Due to the Chinese government's zero-COVID stance, widespread mobility restrictions may occur in major cities, weighing on household consumption and might further disrupt supply chains in the near term. With China’s unmatched role in global trade and as a key manufacturing hub, we are likely to feel some downstream effects on supply chains in the coming months if the outbreak flares. Needless to say, supply chain disruptions are far from over.
With Russia's ongoing invasion of Ukraine, the effect on Canada's trade balance has been reflected in increased demand for exports and much higher prices paid for commodities in particular. Government revenues in Saskatchewan, Alberta, and Newfoundland & Labrador will also bear the markings of higher inflows. However, cooling consumer demand growth will act as a brake on imports.