The Weekly Review, July 2 to 5, 2024

Canada’s merchandise exports and imports decreases in May 2024

In May, Canada’s merchandise exports decreased 2.6%, while imports were down 1.6%. As a result, Canada’s merchandise trade deficit with the world widened from $1.3 billion in April to $1.9 billion in May. This represents a third consecutive monthly deficit. Overall, declines were observed in 8 of the 11 product sections. In real (or volume) terms, total exports were down 1.7% in May.

Source: Canadian international merchandise trade, May 2024

Canada’s monthly international trade in services deficit narrows in May 2024

Canada’s monthly international trade in services deficit narrowed from $1.1 billion in April to $1.0 billion in May. Overall, exports of services increased 0.5% to $17.0 billion, while imports of services edged down 0.2% to $18.1 billion. Exports of commercial services rose 1.2% to $11.0 billion in May, which was partially offset by lower exports of transportation services (-2.0%). Imports of commercial services were down 1.2% to $10.3 billion in May, mainly because of lower payments of financial services. Imports of travel services increased 2.3% to $4.5 billion on higher spending by Canadian travellers visiting US destinations.

Source: Canadian international trade in services, May 2024

Passengers return to the skies in 2023

In 2023, the number of passengers enplaned and deplaned at Canadian airports increased to 150.7 million. This number was 26.8% above that recorded in 2022 and represented 92.5% of the 2019 level, prior to the COVID-19 pandemic. Canada’s largest airports saw similar gains in passenger traffic in 2023, with Toronto/Lester B. Pearson International, Vancouver International, Montréal/Pierre Elliott Trudeau International and Calgary International each reporting at least a 24% increase from 2022.

Source: Airport activity, 2023

Employment rate falls slightly in June 2024

Employment was virtually unchanged in June (-1,400; -0.0%) and the employment rate fell 0.2 percentage points to 61.1%. The unemployment rate increased 0.2 percentage points to 6.4% in June and has risen 1.3 percentage points since April 2023. In June, employment fell among young men aged 15 to 24 (-13,000; -0.9%), while it increased for core-aged women (25 to 54) (+19,000; +0.3%). There were declines in the number of people working in transportation and warehousing (-12,000; -1.1%) as well as in public administration (-8,800; -0.7%). At the same time, there were more people employed in accommodation and food services (+17,000; +1.5%) and in agriculture (+12,000; +5.5%).

Source: Labour Force Survey, June 2024

The construction sector is not operating at full capacity in the first quarter of 2024

The industrial capacity utilization rate (the ratio of actual output to potential output) for the construction sector was 82.7% in the first quarter of 2024, a slight uptick from 82.6% in the previous quarter. These were the two lowest quarterly rates since the first quarter of 2017 (82.5%) and more than a 10-point drop from the second quarter of 2021 (92.9%). Since we started tracking capacity utilization in 1987, the industrial capacity utilization rate has gone as high as 98.3% in the first quarter of 1990. In the second quarter of 2024, rising inflation was the most commonly expected obstacle among construction businesses, with 52.2% of businesses expecting this obstacle, followed by the rising cost of inputs (43.2%) and rising interest rates and debt costs (40.7%). These proportions were similar to those for all businesses (54.4%, 44.6% and 40.6% respectively).

Source: The construction sector is not operating at full capacity—here are some data that could explain why