Tuesday, July 20, 2004

Trade surplus narrows

Canada’s merchandise trade surplus fell to $5.2 billion in May, as imports hit a record high and exports rose modestly.

Canadian companies imported $31.6 billion worth of merchandise in May, the strongest import month ever. The 7.8% increase from April was the biggest monthly gain since January 1997. Strong purchases of machinery and equipment were behind the jump.

In comparison, exports rose 1.3% to $36.8 billion, the fourth consecutive monthly increase. May’s trade surplus was down sharply from the most recent high in April of $7.0 billion.

Despite the big gain in imports, Canada's cumulative trade surplus for the first five months of 2004 was nearly $4.5 billion higher than it was in the same period last year. This was partly the result of a strong recovery in exports.

The trade surplus with the United States fell from $9.1 billion to $8.3 billion, as imports grew more strongly than exports. Canada ran a trade deficit with all other countries.

Largest deficit with China

Canada has its largest country-to-country trade deficit with China. Our imports from China have surged in recent years to second overall behind the United States.

Imports of machinery and equipment, which hit a 20-year high in May, accounted for half of the month’s total gain in imports.

These imports have recovered briskly from their decline in 2003, despite the strong value of the Canadian dollar compared with its US counterpart.

The gain in imports of machinery and equipment was widespread, led by higher imports of telecommunications equipment, office machinery, marine transportation equipment, home furnishing parts and laboratory equipment.

For more information, contact Matthew MacDonald (613-951-8551), International Trade Division.

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© 2004, Statistics Canada.