MNI DATA REACT: Canada Apr Exports, Imports Post Record Falls

--Trade Balance -CAD3.3B Vs Forecast -CAD3B

By Greg Quinn

     OTTAWA (MNI) - Canada's exports and imports saw record declines in April as

Covid-19 shut auto plants and energy prices swooned, widening the trade deficit

to CAD3.3 billion from CAD1.5 billion.

     Exports fell 30% to CAD32.7 billion and imports by 25% to CAD35.9 billion,

both the lowest totals in about a decade, Statistics Canada said Thursday from

Ottawa. The declines in exports and imports were all-time records in dollar

value and percentage terms. 

     The trade balance remained close to the MNI economist median of -CAD3

billion, and it was the largest deficit since February 2019. Statistics Canada

said low oil prices and physical distancing rules in auto factories suggest

exports will be weak again in the next report for May. 

     Canada's border with its major trade partner the U.S. remains closed to

most everything but essential goods shipments. Large crowds flouting health

rules to protest against police brutality across major American cities suggest

the border closure will be prolonged and further restrict the movement of goods.

The Bank of Canada on Wednesday said while the worst global damage from Covid-19

has passed, GDP may decline 20% in the second quarter and it will press ahead

with unprecedented asset purchases to aid the recovery.

     Exports declined in all 11 major categories except for an 8.3% rise in

metals and minerals to CAD1.8 billion.  

     --STALLED AUTOS

     Auto and parts exports plunged from CAD6.4 billion to CAD1.1 billion in

April as assembly plants closed, and imports from CAD8.2 billion to CAD1.9

billion. 

     "In May, most auto assembly plants in North America gradually resumed

production, which should lead to increased trade in the coming months,"

Statistics Canada's report said. "Given physical distancing restrictions,

complexities surrounding restarting supply chains, and low demand for new

vehicles, a return to pre-COVID-19 production levels is not expected in the near

term."

     Energy exports fell 44% to CAD4.7 billion, including a 55% fall in crude

oil amid a global supply glut and reduced demand amid health lockdowns. Consumer

goods imports dropped the most since 1988, by 12% to CAD9.2 billion, reflecting

store closures. 

--MNI Ottawa Bureau; +1 613-314-9647; email: greg.quinn@marketnews.com

[TOPICS: MACDS$,M$C$$$,MI$$$$]