Imports hit record new record high

Canadian companies imported $31.6 billion worth of merchandise in May, the strongest import month ever, Statistics Canada reported this morning.

The 7.8% increase from April was the biggest monthly gain since January 1997. With the small price increase taken into account, the value of imports registered in constant dollars also hit a new high ($32.6 billion) as much of the growth in May was volume-induced.

Canadians purchased $21.8 billion from south of the border, a 6.7% rise from April.

Imports increased from most major trading regions, particularly Japan and the newly expanded European Union.

Purchases of machinery and equipment rose by $1.2 billion in May, accounting for half of the total gain in imports.

In total, companies imported more than $9.6 billion in machinery and equipment, the highest monthly level for this sector in over 20 years.

Imports of machinery and equipment have recovered briskly from their decline in 2003, despite the strong value of the Canadian dollar compared with its US counterpart. With most machinery and equipment being imported, this may be an indication of increasing business and capital investment for Canadian companies.

This gain was widespread, led by higher imports of telecommunications equipment, office machinery, marine transportation equipment, home furnishing parts and laboratory equipment.

Imports of automotive products, mainly from the United States, rose 6.3% as imports of motor vehicle parts rebounded after two months of decline. Some growth in assembled trucks and automobiles also occurred.

Higher purchases of pharmaceutical products were a large contributor to the rise in imports of consumer goods, which hit a new high of $4.1 billion. Also increasing were imports of home furnishings and apparel and footwear.
Imports of industrial goods and materials jumped $200 million in May, following a $250 million rise in April. Strength in plastics, chemicals and their related products led the gains in May, a change from the metal and metal ore commodities that had been rampant earlier.

Price increases for crude petroleum caused the bulk of the import rise in the energy sector, with most of the 30% growth from the previous year being price induced. Petroleum and coal products reached a record high of $420 million on steady gains throughout the past few months.