Canada’s exporters suffered an unexpected setback in May amid weakness in the auto industry.

Exports fell 0.1 per cent during the month, the first decline since January, Statistics Canada reported Friday from Ottawa. Were it not for price increases, the decline would have been sharper, with volumes down 1 per cent in May.

The export drop drove the trade deficit to a wider than expected $2.8 billion, and will be seen as a disappointing result for a sector that had been showing signs of strength. After struggling through the middle part of last year, exports had seen a revival in recent months due to a run-up in oil prices and stronger demand for non-energy exports.

Imports rose 1.7 per cent in May, after falling a month earlier. Economists surveyed by Bloomberg News had anticipated the trade deficit would widen to $2.2 billion, from $1.9 billion in April.

Other Trade Highlights

  • In real terms, imports were up 1.2 per cent
  • Shipments of aircraft and energy products contributed the most to the increase in May, Statistics Canada said
  • Imports of refined gasoline also shot up due to temporary refinery shutdowns in Canada
  • The auto sector was the leading driver of the export decline, with car exports down 3.6 per cent. Statistics Canada cited in part a disruption in the supply of auto parts for the fall Auto sales are down 15 per cent over the first five months of 2018, compared with the same period in 2017
  • Exports of metal ores and minerals also posted a sharp decline -- 15 per cent -- due to work stoppages
  • Higher exports in the aircraft sector and forestry products helped offset the overall decline