OTTAWA, Ont. — Motor carriers who rely on transborder business for a good portion of their revenue base are in for a rough ride.

Merchandise exports plunged to their lowest level in 19 months in May, Statistics Canada reported this morning. Imports were also down to their lowest level since the start of 2002.
Companies exported goods worth just over $32.6 billion, down 2.8 per cent from April and the lowest level since October 2001.

Exports fell in all major categories except automotive products, which remained flat.

Hardest hit were exports of agricultural and fishing products, which declined 9.1 per cent, and energy products, which were down 7.0 per cent. A drop in natural gas exports accounted for one-third of the decline in total exports. Canada’s beef industry has been trying to cope since May 20, when it was announced that a single breeder cow in northern Alberta tested positive for mad cow disease.

At the same time, companies imported $28.6 billion in goods, a 1.1 per cent decline from April and the lowest level since the start of 2002. Even though the value of imports declined, companies actually imported a higher volume of goods, thanks to the increased purchasing power of the stronger Canadian dollar.

As a result, Canada’s trade surplus with the rest of the world fell from $4.6 billion in April to just under $4.0 billion in May, its lowest level since December 2002.

Exports to the United States, which accounted for 83 per cent of the total, fell 2.8 per cent to $27.1 billion, the lowest level since October 2001. Imports from the United States fell 1.5 per cent to $20.1 billion, accounting for most of the overall drop. The trade surplus with the United States fell by half a billion dollars to $7.0 billion.

Exports to countries other than the United States fell 2.9 per cent to $5.5 billion. The largest declines came from exports to Japan, which fell 23.4 per cent to $686 million, along with exports to other OECD countries, which declined 9.5 per cent to $1.0 billion.
Exports to the European Union increased 11.0 per cent to $2.1 billion.

Imports from all major non-US trading areas declined. Canada’s trade deficit with countries other than the United States increased slightly, from $2.9 billion in April to $3.0 billion in May.

Taking a sector by sector look at May, exports of energy products tumbled 7.0 per cent to just over $4.9 billion.

Companies exported just under $2.3 billion worth of agriculture and fishing products in May, a drop of $227 million from April. This decline occurred after the United States and other nations closed their borders to Canadian meat products and live animals with the discovery of a single case of bovine spongiform encephalopathy (BSE) in Alberta.
This ban in the third week of May contributed to a 25 per cent decline in exports of meat and live animals.

Exports of automotive products remained unchanged at $7.3 billion in May. Exports of passenger autos and chassis exports rose 2.1 per cent to $3.7 billion, but a decline in motor vehicle parts and trucks and other motor vehicles offset this gain.

In the largest sector, machinery and equipment, companies exported $7.6 billion in goods, down 0.6 per cent. Exports of aircraft, engines and parts rose 6.9 per cent to $1.6 billion, while industrial machinery exports increased 2.9 per cent to $1.5 billion. However, these big gains were overshadowed by widespread declines in all other machinery and equipment sub-sectors, from high-tech office and telecommunications equipment to agricultural machines.

Exports of forestry products fell 2.7 per cent to $2.7 billion. Newspaper and other paper exports declined 5.1 per cent to $968 million, while wood pulp and other wood products fell 6.0 per cent to just over half a billion dollars. Offsetting these declines, lumber and sawmill products rose 1.1 per cent to $1.2 billion, benefiting from a 1.5 per cent jump in new single-family housing starts in the United States in May.

Exports of industrial goods and materials fell 2.3 per cent to $5.4 billion, as declines in metal ores, chemicals, plastics and fertilizers more than offset increases in metals and alloys.

Imports in Canada’s largest import sector, machinery and equipment, decreased 3.9 per cent to $7.9 billion, the lowest level since September 1999. Imports of other machinery, which includes high-tech equipment, declined 1.8 per cent to $3.7 billion.

Imports of aircraft and other transportation equipment fell 13.5 per cent to $784 million. Imports of aircraft, engines and parts plummeted 32.6 per cent to just over $384 million, their lowest level since July 1996. Domestic air carriers dealt with lower passenger loads and persistent high fuel costs by purchasing smaller, less expensive aircraft.

Lower prices reduced imports of energy products by 8.8 per cent to $1.5 billion in May. Crude petroleum imports fell 14.2 per cent to $936 million on lower prices, but stable volumes.

Imports of consumer goods fell 2.7 per cent to $3.9 billion. Declines in imports of pharmaceuticals, televisions, radios, apparel, footwear and printed matter accounted for most of the overall decrease.

In contrast, imports of automotive products increased 1.5 per cent to $6.7 billion in May. Imports of passenger autos reversed the previous month’s decline with a 4.8 per cent gain to $2.3 billion, while motor vehicle parts imports destined for Canadian auto assembly plants remained steady at $3.3 billion. Imports of trucks and other motor vehicles decreased slightly to $1.1 billion.

Imports of industrial goods and materials increased 2.6 per cent to $5.6 billion. A 12.0 per cent jump in imports of metals and metal ores to $1.4 billion accounted for most of the sector’s increase.