The nation's trade balance with the world remained relatively unchanged at $5.9 billion, as imports and exports fell by nearly the same value.
Exports fell 1.2% to $39.9 billion, largely the result of declines in automotive products and, to a lesser extent, in agricultural and fishing products, and forestry products. Exports have hovered around the $40-billion mark since December 2006. In constant dollar terms, exports fell to $37.9 billion.
Imports declined 1.4% to $34.1 billion in May, despite robust growth in energy products. In constant dollars, imports rose slightly to $39.2 billion.
Canada's trade surplus with the United States narrowed to $7.8 billion in May from a revised $8.1 billion in April, as exports to Canada's largest trading partner dropped at a sharper rate than imports.
Exports decrease despite record high in industrial goods
Declines in exports of automotive, agricultural and fishing, and forestry products eclipsed record-high exports of industrial goods.
Since the spike registered in December 2006 and the subsequent more moderate increase in March, exports of automotive products have declined. In May, exports for this sector fell 5.8% to $6.4 billion. Passenger autos fell 6.6% to $3.2 billion, registering the largest decline in value and reaching its lowest level since August 2006. Trucks and other motor vehicles decreased 7.3% while motor vehicle parts declined 3.7%, the first decrease since January.
Exports of agricultural and fishing products declined 6.9% to $2.8 billion as wheat plunged 34.1%, offsetting April's increase. Exports of live animals also decreased, although Canada resumed exporting to Russia in May for the first time since the bovine spongiform encephalopathy crisis halted exports in 2003. Live animal exports have been gradually increasing as more countries ratify agreements to accept Canadian cattle.
Forestry products declined 3.8% to $2.5 billion as lumber products registered the largest decline. Exports to the United States continue to account for the majority of Canadian exports of lumber products. These exports continue to be affected by low prices and persistent weakness in the American housing market.
Rising for the third consecutive month, exports of industrial goods set a new record high of $9.2 billion on the continued strength of chemicals, plastics and fertilizers. The main contributor to this increase was inorganic chemicals, fuelled by the growing demand for uranium.
Energy products edged up 0.6% to $7.8 billion as petroleum and coal products rose for the fourth consecutive month, increasing 12.4% to a new record high of $1.6 billion. The majority of the increase was due to a rise in volume.
Increased demand for aircraft, engines and parts from Canada's aerospace industry pushed exports of aircraft and other transportation equipment up 16.7% to $2.1 billion, the highest level since February 2002. This jump translated into a 1.8% increase in machinery and equipment exports, which reached $8.3 billion.
Imports fall for the second consecutive month
Strong growth in energy imports failed to offset the declines registered by most sectors in May. Automotive products and other consumer goods led the decrease.
Imports of automotive products dropped for the second consecutive month, down 5.4% to $6.5 billion. Motor vehicle parts registered the largest decline (-5.5%), falling to just below the $3-billion mark for the third time since 2001. Imports of passenger autos also declined, down 7.3% to just under $2.0 billion. Trucks and other motor vehicles fell 2.3%, the first decrease in five months.
Imports of other consumer goods contracted for the second month in a row, declining 5.7% to $4.4 billion. Imports of watches, sporting goods and toys led the drop as these commodities returned to previous levels following the record increase in April.