Exports Down: Trade Deficit Up
CBJ – Canada’s merchandise trade deficit widened to the second-largest on record in May, as the prolonged oil slump continues to decimate the export industry.
According to figures released by Statistics Canada the deficit widened to $3.34-billion from $2.99-billion in April and was second only to the record $3.57-billion shortfall in March. Exports fell for a fifth month.
The report adds to pressure on Bank of Canada Governor Stephen Poloz to cut interest rates next week for the second time this year, as an expected rebound in non-energy exports fails to materialize. The trade data and a jobs report later this week are the last major indicators before the central bank’s July 15 rate decision.
Although not officially deemed so as of yet because all the figures are not yet known, Canada likely fell into recession in the first half, due to the drop in oil prices.
Exports fell by 0.6% to $42-billion in May, and they declined 6.7% from the same month a year earlier.
Falling crude oil prices earlier this year led to cancelled investments and layoffs in Alberta and four straight contractions in national gross domestic product. Energy exports rose 1.3% to $7.66-billion in May as oil prices stabilized, leaving them down 33.8% over the past 12 months.
Imports rose 0.2% to $45.3-billion, including a 2.3% gain in consumer goods to $9.72-billion.
Canada has posted trade deficits every month this year, and the cumulative 2015 total of $13.6-billion is a record, exceeding the next highest, in 2009, of $2.95-billion.