Increasing global demand and a steady rebound for the first half of 2004 south of the border appear to be eroding any dampening effects that the strong Canadian dollar had over the exporting community.
Exports increased 4.4% in June, the fifth consecutive monthly increase, Statistics Canada reports.
"Except for January, the first half of 2004 has been strong for Canadian exporters. Merchandise exports hit a record high of just over $39.0 billion for June, eclipsing previous record levels achieved during the high-tech boom," Statistics Canada notes in its monthly report.
Exports increased to all principal trading regions, and all trade sectors, except forestry products, registered gains.
Expanding demand south of the border helped increase exports to the United States by 2.9%.
Exports to countries other than the United States rose 11.3% to $7.4 billion, while imports dropped 4.0% to $9.5 billion. As a result, Canada’s non-US trade deficit narrowed to $2.1 billion.
Export prices rose 0.5%, indicating strong real export growth.
Merchandise exports have increased by over 21% since January, when they began their steady ascent. Cumulative exports from January to June 2004 are $10.0 billion higher then compared with the same period last year.
Strong shipments abroad, resulting from high international demand, have increased domestic manufacturing activity. Meanwhile, exporters have been enjoying high prices for energy, forestry and industrial goods and material products.
Exports of industrial goods and materials rose 9.9%, continuing their record-setting pace after a pause in May. Leading the gains were higher exports of metals and alloys, in particular nickel and precious metals.
Aircraft exports, which totalled $1.3 billion, went mainly to regional airlines in the United States. This value is roughly 65% of the peak export value reached in November of 2001, which pushed the machinery and equipment sector to $8.2 billion for the month.
Automotive exports have shown modest, yet steady, gains so far this year in contrast to the volatility observed during the latter half of 2003. Despite a slight slowdown in US auto sales in June, where most of these products are destined, total exports for this sector advanced 1.5% to $8.1 billion. Exports of passenger cars, which comprise the majority of total shipments, increased 2.1%, while trucks and other motor vehicles increased 2.3%.
Higher exports of diesel, jet fuel and propane continued to push petroleum and coal product shipments to new highs. Combined with higher natural gas prices, they fuelled the third consecutive gain for the energy sector.
Sustained demand for most energy products, as well as concerns over supply for crude petroleum in particular, have resulted in increasing energy prices for the majority of 2004.
Exports of agricultural and fishing products reached just shy of $3.0 billion. Exports of some products are reaching new peaks, especially preparations containing fish, meat or cereal. In the last five months, exports from this sector have grown 23.5%, boosted by stronger prices. Wheat exports, mainly to overseas destinations and China in particular, grew by $82.0 million in June, as a result of higher volumes and prices.
Exports of consumer goods grew 2.7% to a new high of $1.6 billion.
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