OTTAWA (Reuters) - Canada’s exports rose in May as auto industry production resumed and on higher crude prices, though imports fell on supply challenges tied to the gradual reopening of countries from COVID-19 closures, Statistic Canada said on Thursday.
Total exports rose 6.7% to C$34.6 billion ($25.5 billion) in May, its largest jump since January 2014 bouncing back from historic declines in April, and imports declined 3.9% in May to C$35.3 billion, the data showed.
“Looks like the worst is behind us, there’s a small rebound and it’s broadly based, which is good news,” said Peter Hall, chief economist at Export Development Canada.
Canada’s trade deficit in May was C$677 million, while StatsCan revised April’s trade deficit to C$4.3 billion from C$3.3 billion. Analysts polled by Reuters had forecast a shortfall of C$3 billion in May.
The Canadian dollar CAD=D4 turned higher after the release of the data, touching 1.3573 per U.S. dollar, or 73.68 U.S. cents.
Exports of energy products rose 14.5% in May, mainly on higher exports of crude oil, while motor vehicle and parts exports began to ramp up, gaining C$822 million.
Despite the monthly increase, exports of motor vehicles and parts were down by almost 80% compared with May 2019, StatsCan said, while the monthly value for crude oil exports was still about one-third of what it was in January.
“Trade is the lifeblood of Canada’s goods sector, but even with exports seeing some improvement in May, we’re still a long way from clearing out the clots that emerged in the coronavirus recession,” Avery Shenfeld, chief economist at CIBC Capital Markets, wrote in a note.
The coronavirus pandemic disrupted global supply chains and forced officials in Canada to shutter non-essential businesses. In recent weeks, regions across Canada have gradually begun to restart their economies.
Additional reporting by David Ljunggren and Dale Smith in Ottawa; editing by Jonathan Oatis