Canada’s exports and imports plunged in April on falling oil prices and as the coronavirus pandemic shut down factories and retail stores, Statistics Canada said on Thursday, adding that the reopening of most auto assembly plants may help trade in the coming months.
“We are really getting hammered with respect to cars and crude,” said Peter Hall, chief economist at Export Development Canada.
Total exports fell 29.7 per cent to $32.7 billion in April, the lowest level in more than 10 years, and imports declined 25.1 to $35.9 billion, the lowest since February 2011, Statscan said.
The April trade deficit widened to $3.25 billion from a revised $1.53 billion in March, Statscan said, larger than the $2.36 billion forecast by analysts in a Reuters poll.
Exports of energy products fell $3.6 billion, the largest decrease on record, Statscan said. Crude oil exports led the decline, plunging 55.1 per cent.
Meanwhile, exports of passenger cars and light trucks slumped 84.8, while imports plunged 90 per cent.
The slump in auto and energy exports because of shutdowns was also reflected in Canada-U.S. trade data, where total trade fell by $23.4 billion, representing more than 90 per cent of Canada’s trade activity decline. The neighbouring countries’ automotive and energy sectors are highly integrated.
The coronavirus pandemic has disrupted global supply chains and forced officials in Canada to shutter non-essential businesses and urge people to stay at home. In recent weeks, Canada’s 10 provinces have gradually begun to restart their economies.
“While some factories and retailers began to reopen in May, it’s likely to take until the June data to see any material signs of rebounding economic activity,” said Royce Mendes, a senior economist at CIBC.
“With the focus now shifting to the recovery stage, and with many economies gradually re-opening since May, the worst is hopefully in the rearview mirror,” TD Bank economist Omar Abdelrahman said.
The Canadian dollar extended its decline after the release of the data, falling to 73.88 cents US.