Both exports and imports take a dip in February

Canada’s exports, the foundation of the nation’s economic growth, declined for the second consecutive month in February as exports fell in most major commodity groups, notably energy products and machinery and equipment.

Businesses exported $35.1 billion worth of goods, down 4.5% from January, Statistics Canada reports. Lower exports to the United States accounted for two-thirds of the decline. Imports fell for the third straight month, 2.8%, to $29.3 billion. The resulting merchandise trade surplus amounted to almost $5.9 billion in February, down from nearly $6.7 billion in January.

Canada’s trade surplus with the United States fell to $9.1 billion in February after surpassing the $10-billion mark in January.

A two-month decline in exports follows a year in which exports recorded their strongest annual growth since 1995. Exports grew gradually during 2000, reaching a record $36.8 billion in December.

Exports fell in most major commodity groupings during February, led by machinery and equipment, which fell 8.2% to $8.5 billion. Exports of other machinery and equipment, which includes the subgroups telecommunications and television equipment and fibre optics and office equipment and machinery, fell 10.0% to $5.2 billion. This marks the second consecutive monthly decrease from the record of $6.2 billion set in December.

Despite a decline of 12.3% in exports of telecommunications and television equipment, consisting mainly of optical network equipment and wireless communications equipment, February exports in this sector were still 12.8% ahead of the pace in February 2000.

Exports of other equipment and tools, which includes fibre optics and office furniture, fell 6.2% to $1.9 billion. While exports were down 6.5% from December’s record $2.1 billion, they were still 10.6% higher than in February 2000.

Exports of automotive products fell 2.7% to $7.2 billion, as Canadian automakers continued to scale back production. The value of passenger car exports fell 3.4% to nearly $4.0 billion, while truck exports declined for the fourth straight month, a 3.0% drop to $1.3 billion. Exports of motor vehicle parts fell for the eighth straight month in February, declining another 1.0% to $1.9 billion. Since June 2000, motor vehicle parts exports have fallen 22.3%.
Aircraft and other transportation exports fell 3.5% to $1.9 billion. Within this group, other transportation equipment exports fell 16.6% to $427.2 million, while exports of aircraft engines and parts exports rebounded 1.2% in February to $1.4 billion.

Driven by a decline in demand for durable goods, exports of industrial goods and materials, mainly nickel and copper, decreased 3.8% to almost $5.4 billion. Metals and alloys increased by 5.1% to $1.7 billion, mainly on the strength of a 41.3% rise in the value of precious metal and alloy exports to $377.6 million.

Steady supply, combined with a drop in the price of natural gas, led to a 6.7% reduction of exports in the energy sector to $5.8 billion. Despite two months of decline following a record setting December, energy exports were 57.2% higher than in February 2000.

Continued high demand for electricity in California extended the rise in electricity exports for the fourth straight month. The value of electricity exports has doubled in value to more than three-quarters of a billion dollars.

With the exception of automotive parts, imports didn’t fare much better. Imports of automotive parts rose 6.1% to $3.4 billion in February, halting five consecutive months of declines, as manufacturers brought parts inventories in line with seasonal production levels. However, the increase was not great enough to offset declines in imports of passenger autos, down 13.3% to $1.4 billion and trucks, down 5.2% to $674.2 million. Overall, companies imported $5.4 billion in automotive products, down 1.1% from January, and down 16.0% from February 2000.

Imports of energy products fell 21.8% to $1.4 billion, mainly a result of a 28.6% drop in crude petroleum imports to just under $1.0 billion.

Machinery and equipment accounted for just over one-third of all merchandise imports in February. A 5.0% decline from January in machinery and equipment imports resulted from a drop in imports of computer chips and semi-conductors, part of the other communication and related equipment group, which fell 9.3% to $2.1 billion. Imports of office machines and equipment slipped 1.6% to $1.6 billion. Imports of industrial and agricultural machinery fell 3.2% to $2.4 billion.
Imports of industrial goods and materials rose 1.8% to $6.0 billion. Within this sector, metals and metal ores imports fell 5.0% to $1.3 billion, a result of reduced demand for durable goods, such as automobiles and aircraft, of which copper and steel are major components.