Toronto, Ontario — Following historic declines in April that saw exports and imports lose more than one-quarter of its monthly value due to the COVID-19 pandemic, exports increased by 6.7 percent in May, mainly reflecting the resumption of production in the auto industry, says a recent report by Statistics Canada.
Stats Canada’s report found that motor vehicles and auto parts exports ramped up in May gaining $822 million, which was a significant improvement from April’s $5.3 billion. Despite this month’s increase, exports of motor vehicles and parts were down by almost 80 percent compared with May 2019.
Both passenger cars and light trucks and engines and parts contributed to the monthly increase. By mid-May, some non-essential businesses in Canada, including automobile and automotive parts manufacturers, re-opened and gradually resumed production, which led to an increase in exports.
Despite resilience in auto exports, imports continued to decline throughout May. After falling 25.2 percent in April, total imports declined a further 3.9 percent in May to $35.3 billion, with seven of 11 product sections decreasing. On a year-over-year basis, total imports have lost almost one-third of their value.
Following a 77.0 percent decrease in April, imports of motor vehicles and parts (-14.8 percent) declined again in May. Imports of passenger cars (-96.5 percent) fell to almost zero, mainly on lower imports from non-U.S. countries.
This occurred despite many auto plants resuming production world-wide in May. When restarting production, foreign manufacturers are likely to prioritize domestic (or US) demand before exporting to other countries. Additionally, overseas countries such as South Korea, Japan and Germany were the main contributors to this month’s decrease. Shutdowns in those countries in April impacted Canadian imports in both April and May due to shipping time lags.
Imports of engines and parts (+18.0 percent) however, were back up in May, mainly due to increased imports from the United States and Mexico.
