International Trade

Merchandise Trade

May 2022

Big Export Gains Drive Trade Surplus To a 14-Year High

HIGHLIGHTS

  • Canadian merchandise exports rose 4.1% to $68.4 billion in May, while merchandise imports edged down 0.7% to $63.1 billion.
  • Canada’s merchandise trade surplus widened sharply from $2.2 billion in April to $5.3 billion in May, the largest trade surplus since August 2008.
  • After removing price effects, export volumes were up 1.6% and import volumes were down 1.4%.
  • The increase in nominal exports spanned 8 of 11 major commodity groups and was predominately driven by crude oil and aircraft.
  • Exports to the U.S. rose 2.4% to $52.9 billion in May, while exports to the rest of the world jumped 10.6% to $15.5 billion.
  • Canada’s exports and trade surplus continue to be buoyed by higher prices, especially for commodities. Unfortunately, the country’s export performance has been much less impressive when viewed in real terms. Since the beginning of 2022, the value of exports has risen by more than 20%, but export volumes are down 2.3%.

EXPORTS STAY ON UPWARD TREND WHILE IMPORTS EDGE DOWN

Canada’s merchandise exports rose 4.1% to $68.4 billion in May. This was the fifth consecutive monthly increase and the tenth gain over the past twelve months. On the other hand, imports decreased 0.7% to $63.1 billion, down for the first time in four months. Imports from China fell sharply, reflecting the fallout from COVID-19 lockdowns in key manufacturing hubs.

After removing price effects, export volumes were up 1.6% in May, while import volumes were down 1.4%.

Canada’s exports and trade surplus continue to be buoyed by higher prices, especially for commodities. Unfortunately, the country’s export performance has been much less impressive when viewed in real terms. Since the beginning of 2022, the value of exports has risen by more than 20%, but export volumes are down 2.3%.

CANADA’S TRADE SURPLUS WIDENS SHARPLY

Canada’s merchandise trade surplus widened sharply from $2.2 billion in April to $5.3 billion in May, the largest trade surplus since August 2008. Breaking these data down, our trade surplus with the U.S. widened from $12.9 billion in April to another all-time high of $14.0 billion in May. At the same time, following the record $10.7 billion deficit recorded in April, our trade deficit with the rest of the world narrowed to $8.6 billion in May.

INCREASE IN EXPORTS DRVIEN BY CRUDE OIL AND AIRCRAFT

The increase in nominal exports was widespread, spanning 8 of 11 product categories. Exports of energy products contributed the most to the growth, rising 5.7% to $20.4 billion in May. Export prices for crude oil have nearly doubled since May 2021, with recent gains triggered by the Russian invasion of Ukraine.

Non-energy exports also had a strong month, up 3.5% to $48.1 billion in May. Exports of aircraft and other transportation equipment and parts surged 34.2% to $2.1 billion. Exports of aircraft saw an especially big jump, thanks mainly to higher exports of business jets to the U.S.

Exports of metal ores and non-metallic minerals rose 17.2% to a record high of $3.1 billion in May. Exports of potash led the increase, partly because of a large gain in exports to Brazil. Countries are turning to Canada to replace fertilizer products that they normally purchase from Russia, which has been hit by severe sanctions. Exports of copper ores and concentrates also experienced a notable increase in May, mainly on higher exports to South Korea.

On the downside, exports of motor vehicles and parts fell 3.8% to $6.7 billion in May, the first decline in four months. This could be a worrying sign of renewed supply chain issues.

CANADIAN EXPORTS TO THE U.S. INCREASE FOR FIFTH STRAIGHT MONTH

Exports to the U.S. climbed 2.4% to $52.9 billion in May, up for the fifth month in a row. At the same time, exports to the rest of the world jumped 10.6% to a record high of $15.5 billion. Among Canada’s major non-U.S. trading partners, exports to the U.K., the EU, Japan, and South Korea were up, while exports to Mexico and China were down. The increase in exports to the U.K. was driven by higher exports of crude oil and gold.