MNI 5 THINGS:Canada Goods Trade Gap Widens,Lrgr Than Expected>

--5 Things We Learned From Canadian Merchandise Trade Data

By Courtney Tower

     OTTAWA (MNI) - The following are the key points from the May data 

on Canadian merchandise trade released Friday by Statistics Canada: 

     - The goods trade deficit widened to C$2.8 billion in May, larger 

than the C$2.2 billion deficit that analysts in a MNI survey had 

expected. This was marked by a drop in exports to the United States, by 

0.2% from April's 2.8% increase. Exports overall edged down 0.1% while 

imports rose 1.7%. In real terms, the weakness in exports was even more 

apparent with a 1.0% drop, while exports rose 1.2%. 

     - Exports dropped in May to C$48.3 billion on lower exports of 

motor vehicles and parts, down 3.6% on the month. Real exports excluding 

autos and parts rose 0.5% on the month. Statistics Canada cited a 

disruption in the auto parts in the U.S. that led to lower imports of 

engines and parts, and in turn affected Canadian auto exports. Exports 

of metal ores and non-metallic minerals also dropped notably, down 14.6% 

to C$1.3 billion, on work stoppages in iron mines in April and May. 

Energy exports rose 4.0%. Real exports excluding energy fell 1.6%. 

     - The 1.7% rise in imports to C$51.1 billion covered eight of the 

11 product sections, largely in increased imports of aircraft and other 

transportation equipment and parts (+17.7%). It was the fifth 

consecutive monthly advance for this sector. Imports of refined 

petroleum energy products rose by 13.9%, with a number of Canadian 

refineries closed down in May. 

     - Canada's goods trade surplus with the United States narrowed from 

C$3.7 billion in April to C$3.3 billion in May. Imports from the U.S. 

were up 1.0% in May, as exports dropped by -0.2%. Exports to countries 

other than the U.S. edged up by 0.2% with notable gains of 

transportation equipment to Saudi Arabia and unwrought gold to Hong 

Kong. These increases were partially offset by lower exports to France 

(-43.2%) and The Netherlands (-30.5%). 

     - Imports of industrial machinery equipment and parts, a sector 

specifically followed by the Bank of Canada as an indicator of 

investment activity, rose by 1.2% in May after declining by 0.9% in 

April. Volumes in May were up by 0.3%.  

          --MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

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