Canada’s trade deficit widened to a record $3.4 billion in March as exporters saw widespread declines across industries.
Exports to both the United States dropped 6.3%, while imports from the United States to Canada also fell by 4.8%, according to Statistics Canada data released May 4. Exports to countries other than the United States, including China, also fell, increasing Canada’s trade deficit with non-U.S. countries from $4.6 billion in February to $4.9 billion in March.
The drop contrasts with recent economic indicators — GDP and jobs — that showed growth in Canada’s economy.
The weakness in the export numbers can be linked a slowdown in U.S. imports, CIBC economist Nick Exarhos wrote in a note to investors. The dismal export numbers can be expected to drag down GDP for March. However, with the Canadian dollar expected to remain in the $0.75-$0.79 range, "Canada's export sector should remain a key source of strength over the medium term," wrote TD economist Leslie Preston in a note.
The drop in exports was felt across industries, with 10 out of 11 sectors seeing a decline. Exports of motor vehicles and parts fell 6%, consumer goods dropped 4.6% and metals and minerals fell 5.4%.
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