Merchandise trade surplus dives to $1.5B in April but supply woes may be easing

Canada's merchandise trade surplus fell to $1.5 billion in April as both imports and exports hit record highs, helped by rising prices, Statistics Canada said Tuesday.

The agency said the result compared with a revised surplus of $2.3 billion in March.

In volume terms, imports fell 0.4 per cent in April, while exports dropped 2.1 per cent.

CIBC senior economist Karyne Charbonneau said the report was “somewhat disappointing” but added that the details suggested the weakness should be temporary, particularly for oil exports which should rebound.

“Nevertheless, for now exports look like they may not provide the boost to Q2 GDP that we and the Bank of Canada expected,” Charbonneau wrote in a report.

“Still there are encouraging signs that supply disruptions might be easing, particularly in the auto sector. With the lifting of the lockdowns in China, we should also see a rebound in imports from that country in the months ahead.”

Total imports in April rose 1.9 per cent to $62.8 billion as imports of consumer goods gained 5.5 per cent with the clothing, footwear and accessories subcategory up 24.2 per cent.

Meanwhile, total exports gained 0.6 per cent to come in at $64.3 billion for April.

Exports of consumer goods rose five per cent, boosted by prepared and packaged seafood products, which gained 52.4 per cent due in large part to strong crab prices, while the quantity of crab exported also contributed to the increase.

Statistics Canada also said exports of energy products fell 0.9 per cent in April as exports of crude oil fell 14.3 per cent, due to planned shutdowns for maintenance in April in the Alberta oilsands.

For now exports look like they may not provide the boost to Q2 GDP that we and the Bank of Canada expected.

The drop in oil came as higher prices helped boost exports of natural gas 48.4 per cent and higher volumes helped lift coal exports 62.8 per cent for the month.

Overall, Canada's trade surplus with the United States fell to $11.6 billion in April compared with the record high of $12.2 billion in March. Canada's merchandise trade deficit with countries other than the United States was $10.1 billion in April compared with $9.9 billion in March.