Canada’s trade balance fell by $376 million in March to $4.4 billion, the lowest level since October 2001, Statistics Canada reports.
The 7.9% drop from February was a result of falling exports to all of Canada’s principal trading partners except Japan and the “other OECD (Organisation of Economic Co-operation and Development) countries” group.
Canadian companies exported $33.2 billion in goods, down 2.0% from February’s revised level, the largest monthly rate of decline since October 2001. Machinery and equipment, which accounts for 22.3% of total exports, fell by $630.2 million.
Merchandise imports, however, fell at one-half the pace of exports to $28.8 billion, a 1.0% decrease from February. As a result, Canada’s overall trade surplus fell for the second consecutive month.
The trade surplus with the United States fell by $229 million to $7.4 billion. Canadian companies sent $28.3 billion in goods to the United States in March, down a slight 0.6% from February, while they imported $20.9 billion worth, up 0.2%.
The United States accounted for more than one-quarter of the decrease in Canada’s exports in March, while imports remained virtually unchanged. Consequently, Canada’s total trade deficit with other nations widened by $147 million to $3.0 billion in March.
The three largest export sectors all slid during the month.
The automotive products export sector fell 4.3% to $7.9 billion, a result of stagnating fleet and rental company sales in the United States. Passenger auto exports fell 5.0% to $4.1 billion. Trucks and other motor vehicles exports dropped 3.2% to $1.5 billion. Motor vehicle parts exports fell 3.6% to $2.3 billion.
In the machinery and equipment sector, exports fell 7.8% to $7.4 billion. The $630.2 million decline was led by aircraft and other transportation equipment, where exports fell 26.0% to $1.5 billion. However, this month’s decline in aircraft and other equipment is more a result of strong domestic demand for Canadian-built aircraft rather than weakness in the export market. Exports of aircraft engines and parts in March were more than half a billion dollars lower than in February.
Low commodity prices and production cutbacks hit the industrial goods and materials sector hard in March. The export sector fell 7.6% to $5.4 billion. A 18.2% drop in metals and alloys exports to $1.7 billion accounted for over half of this sector’s decline. Other industrial goods and materials exports fell a slight 0.6% to $1.5 billion. Exports of chemicals, plastics and fertilizers declined 1.0% to $1.9 billion. Metal ores exports fell 10.8% to $425.9 million.
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