International trade in machinery and transport equipment intensifies
Ottawa, ON -- Canada's international trade (both imports and exports) has become increasingly intensive in machiner...
Ottawa, ON — Canada’s international trade (both imports and exports) has become increasingly intensive in machinery and transport equipment, according to a new report analyzing long-term trends during the past two decades.
Increased trade in this commodity group can be taken to a large extent as an indicator of the proliferation of technology across nations. The group is dominated by high- and medium-high technology-intensive goods, such as power-generating machinery and equipment, automotive products, aircraft and associated equipment and parts, office machines and automatic data processing equipment, telecommunications and sound-recording equipment.
In 1980, machinery and transport equipment accounted for 26.4% of Canada’s total exports and 46.3% of total imports.
By 1999, the share in total exports had peaked at 42.5% while the share of total imports peaked at 53.2%.
By 2003, the share of exports had slipped to 35.9% while the share of imports had settled to 47.6%. The value of exports of machinery and transport equipment in 2003 amounted to $135.2 billion, while imports were worth $158.1 billion.
The growth in both exports and imports of machinery and transport equipment tracked the major economic developments and business cycles of the past two decades.
During the 1980s, the United States accounted for just over 88% of Canada’s exports of machinery and transport equipment, which averaged $38.6 billion annually. During the 1990s, its share rose to 90.7% of total exports, which averaged $91.3 billion a year.
Between 2000 and 2003, machinery and transport equipment exports averaged $151.3 billion. The United States was the destination for 90.4%.
On the other hand, the trend in imports has been the reverse. In the 1980s, the United States was the source of about 79.5% of Canada’s $51.6 billion average annual imports in the category. The U.S. share declined to 71% in the 1990s, when total imports of these goods averaged $110.5 billion.
Between 200 and 2003, just over 66% of Canada’s $171.4 billion average annual imports in machinery and transport equipment came from the United States.
While the United States still accounts for about 90% of Canada’s machinery and transport equipment exports, evidence suggests that Canada’s relative importance in U.S. imports in this category has been declining.
In 1990, Canada accounted for 19.3% of total U.S. imports in the category. Since then, the share has continuously fallen to 16.5% in 2003.
The decline in Canada’s share in U.S. imports of machinery and transport equipment was due primarily to the loss in the share of road vehicles. A significant part of the explanation for the loss lies in the emergence of Mexico as a centre for global automotive production.
The article “Key trends in Canada’s international trade in machinery and transport equipment, 1980 to 2003” (65-507-MIE2005002, free) is now available in the publication Canadian Trade Review (65-507-MIE) at www.statcan.ca.