Canadian International Merchandise Trade (May 2015)

Canada's merchandise trade deficit widened to $3.3 billion in May, from $3.0 billion in April. A 0.6% m/m decline in exports was largely responsible, although a 0.2% advance in imports certainly didn't help.

"May's contraction in exports, the fifth consecutive monthly decline. Can largely be attributed to a 2.5% drop in export volumes, in part offset by a 1.9% increase in prices due to a higher Canadian dollar and oil prices. Exports of metal and non-metallic mineral products were down 5.8%, as fabricated metal products decreased 19.7%", says TD Economics.

Metal ores and non-metallic minerals fell 9.2%. Partially offsetting these declines, exports of aircraft and other transportation equipment and parts rose 10.3%, although this didn't make up for the ground lost in March and April. Exports of motor vehicles and parts (+2.7%) were also up, as volumes increased on solid sales activity south of the border. Meanwhile, exports in the all-important energy sector advanced 1.3% in May, for the second consecutive monthly gain, although this was entirely a price story as energy export volumes fell.

The advance in imports in May was relatively broad based, reflecting gains in 7 of 11 sectors. Underlying the headline number was a 0.3% increase in import volumes partly offset by a 0.1% decline in import prices. Most notably, imports of consumer goods (+2.7%), metal and non-metallic mineral products (+5.0%), and basic and industrial chemical, plastic and rubber products (5.1%) posted gains. Meanwhile, imports of aircraft and other transportation equipment and parts declined 12.4%. Imports of industrial machinery, equipment and parts (-5.0%) were also down in the month.