Auto slump blamed for surplus slip (March 10, 2004)

Canada’s trade surplus with the U.S. slipped to $7.3 billion in January, with a stalled automotive sector being blamed for the largest share of the dip in merchandise imports and exports, Statistics Canada is reporting today.

Compared to December, the value of merchandise exports heading south of the border fellfour per cent to$26billion, while imports declined4.2 per cent to$18.7billion.

Merchandise sales to all countries outside Canada dropped 4.7 per cent from December, while imports fell five per cent, lowering the resulting trade surplus to $5.2 billion. Imports fell to $26.6 billion.

Exports have declined in seven of the last 10 months, and imports fell to their lowest level since June 1999 in the face of a strong Canadian dollar.

Automotive products accounted for more than half of the decline in exports, and a third of the decline in imports.

Canada’s trade deficit with countries other than the U.S. remained unchanged at $2.1 billion.

Machinery and equipment exporters sold $394 million less than they did in December, accounting for a 5.5 per cent drop. Combined with automotive products, these sales account for more than 40 per cent of Canada’s merchandise exports.

A drop in machinery and equipment imports in January ended back-to-back monthly gains in the sector.