Canada's trade deficit continues to climb
Canada’s trade deficit has increased for the second consecutive month to C$793mn (US$777mn) from C$623mn in April – its worst deficit in 11 months, Export Development Bank of Canada (EDC) reports.
Canada’s imports rose by 1.4% in May, mainly due to the increase in energy products. Imports of petroleum rose 7.2%, reflecting a short‐term surge in anticipation of temporary shutdowns for maintenance, EDC says.
However, a strong rise in Canada’s machinery and equipment exports offset other weaker performing sectors; exports came in at US$38.9bn in May, helped by the strong performance of aircraft and parts exports which surged 46%.
Agricultural machinery also performed well, rising 5.7% from last month and 20.1% from the same period last year.
Results elsewhere are mixed. Canada's lumber exports have seen healthy increases to the US as the construction industry gets back on its feet, but this growth was overshadowed by weakness in pulp and paper.
The largest decline in May was registered by the energy sector, where exports declined by 4.3% on decreasing volumes of crude petroleum.
Canada's exports to the US and the EU were also flat in May. Exports to the US rose by just 0.2% and to the EU they declined by 0.6%.
The emerging markets growth stayed strong with a 2.8% increase for the month. Exports to the emerging markets have risen dramatically by 15.9% so far in 2012, compared to the same period in 2011. EDC says that Canadian exporters who have diversified into emerging markets will continue to recoup impressive dividends, in spite of global volatility.
Canada's imports of consumer goods fell by 1.75% on weaker consumer spending, but business investment continued to perform well with imports of drilling and mining machinery up 7.4%, excavating machinery up 8.3% and office equipment up 5.3%.