Canada's trade deficit in May rises to $503M

Canada's merchandise exports rose 5.2 per cent in May, led by higher volumes of automotive products, while imports increased 5.7 per cent.

Statistics Canada reports Canada's trade deficit hit $503 million, up from $330 million in April. The data agency had originally reported a small trade surplus in April, before revising it to a deficit.

The May figure is Canada's largest trade deficit since September 2009.

Exports rose to $34.5 billion from $32.8 billion in April after two months of decline.

While all export sectors posted gains, automotive products accounted for more than half the growth. Automotive exports are now 76.8 per cent higher than they were at their lowest point of the recession, and they hit their highest level in more than two years in May.

Export volumes increased 3.9 per cent and prices rose 1.2 per cent.

Imports rose to $35 billion from $33.1 billion in April, as all import sectors, except agricultural and fishing products, grew in May.

'Canadas trade position has settled into moderate deficits.' BMO economist Doug Porter

"After some surprisingly snappy surpluses to start 2010, it appears that Canadas trade position has settled into moderate deficits for the longer haul," BMOeconomist Doug Porter said. "However, the good news here is that the latest deterioration is due to robust imports, not weak exports."

With the United States alone, exports increased 5.5 per centwhile imports grew 5.8 per cent. That pushed Canada's trade surplus with the United Stateswider, to $3.6 billion in May from $3.5 billion in April.