OWWATA: The value of goods shipped across the U.S.-Canadian border dropped 12.5 percent in April, thanks in part to a weaker Canadian dollar and a shrinking Canadian economy.
In April, all transport modes carried a lower value of U.S.-Canada freight than a year earlier, the U.S. Bureau of Transportation Statistics said in its monthly report on U.S. cross-border trade. Lower fuel prices depressed pipeline, vessel and rail traffic across the U.S.-Canadian border, the BTS said. Truck and air cargo traffic also declined year-over-year, the federal agency said.
The value of goods transported by truck between the U.S. and its northern neighbor decreased 6.6 percent year-over-year in April, while the value of rail cargo dropped 6.6 percent.
April’s drop was not sudden. From January through April, Canadian imports of U.S. goods in U.S. dollars shrank 11 percent, while exports to the U.S. declined 6 percent, according to data from Global Trade Information Services, a product of IHS Maritime and Trade.
Canada’s second largest trading partner, China, saw a 3.3 percent increase in exports, in terms of value, to Canada during that timeframe, but Canadian exports to China declined almost 8 percent.
The value of goods shipped in U.S.-Canadian trade has been falling since hitting a $58.8 billion monthly peak last October, according to the U.S. Census Bureau. In April, cross-border shipments were valued at $48.8 billion.
That doesn’t mean cross-border shipping volumes declined. In March, the number of U.S.-Canada truck crossings rose 3.3 percent year-over-year, but the value of trucked goods dropped 3.4 percent. In another example, the value of fuels transported by ship between Canada and the U.S. dropped 3.6 percent, but fuel tonnage increased 45.1 percent, the BTS said.
That shows the impact of low oil prices and a Canadian dollar which has dropped in value by about 10 cents against the U.S. dollar over the past year to roughly $1.25 Canadian for $1 U.S.
From January through April, Canadian imports of U.S. goods in U.S. dollars shrank 11 percent, while exports to the U.S. declined 6 percent, according to IHS.
Canada’s second largest trading partner China saw a 3.3% increase of exports to Canada during this timeframe. However exports to China declined almost 8%.
Canada’s economy, like the U.S. economy, contracted in the first quarter, shrinking 0.1 percent — the first quarterly decrease in gross domestic product since 2011, according to Statistics Canada. However, Canadian GDP also shrank 0.1 percent in April, surprising economists who expected a rebound in Canada similar to the second-quarter recovery unfolding in the U.S.
Most Canadian economists expected 0.1 to 0.2 percent growth in April, hardly a rip-roaring restart. The April contraction raised concerns that Canada could be slipping into a mild recession. Goods exports dropped 0.7 percent and Canadian imports fell 2.5 percent.
Canadian retail sales were down 0.1 percent in April from March, according to Statistics Canada. Cross-border truck and rail volume data for April is not yet available from the U.S. BTS.
