(Ottawa) Canadian exports fell at a record low in April, reaching their lowest level in more than a decade, and the country’s trade deficit in April more than doubled from March.
The merchandise trade deficit reached $3.3 billion in April, compared to a deficit of $1.5 billion the previous month, Statistics Canada said Thursday.
The federal agency said the declines in exports and imports induced by the COVID-19 pandemic, both in absolute terms and in percentage terms, were the largest on record.
Exports plunged 29.7% to $32.7 billion in April as measures to slow the spread of the pandemic led to forced closures in the manufacturing sector as retailers closed and energy prices fell.
Imports fell 25.1% to $35.9 billion, the lowest level since February 2011.
In volume terms, exports fell by 19.9% in April and imports decreased by 24.8%.
“The sharp decline in international trade in April is consistent with the freeze in economic activity observed here and around the world,” TD Bank economist Omar Abdelrahman wrote in a note.
“Now that attention is focused on the recovery stage, with many economies gradually reopening since May, the worst is, hopefully, in the rearview mirror.”
However, Abdelrahman stressed that the expected resumption of international trade would be gradual.
“With the automotive category disproportionately contributing to the decline in exports and imports in April, a gradual rebound is expected to support a slight improvement in the figures from May on, although they are not expected to be close to last year’s levels.”
According to Statistics Canada, the motor vehicle and motor vehicle parts sector recorded the largest declines in both exports and imports.
The value of exports in this sector fell to $1.1 billion in April from $6.4 billion in March, when motor vehicle assembly plants began to close in Canada. Imports of motor vehicles and their parts fell to $1.9 billion in April from $8.2 billion in March.
The United States contributed the most to the decline in trade, with exports to the United States falling by 35.7% and imports by 35.3%.
Canada’s trade surplus with the United States declined to $2.2 billion in April from $3.5 billion in March.
Exports to non-U.S. countries decreased by 11.7%, while imports from non-U.S. countries decreased by 6.3%. Canada’s trade deficit with these countries increased to $5.4 billion in April from $5.1 billion in March.
On the services side, Statistics Canada reported that their monthly exports fell 20.5% to $8.1 billion in April, while services imports fell 30.7% to $7.8 billion.
Canada’s trade deficit with the world for combined goods and services totalled $2.9 billion in April.