Statistics Canada building and signs are pictured in Ottawa on Wednesday, July 3, 2019. Statistics Canada is expected to report today that economic growth swung negative in March and the first quarter as a whole due to the COVID-19 pandemic. THE CANADIAN PRESS/Sean Kilpatrick

OTTAWA - Canadian exports posted a record drop as they fell to their lowest level in more than a decade and the country's merchandise trade deficit in April swelled to more than double compared with March.

Statistics Canada said Thursday the trade deficit rose to $3.3 billion in April compared with a deficit of $1.5 billion in March.

The increase came as the agency said the pandemic-induced declines in exports and imports, in both absolute value and percentage terms, were the biggest on record.

Exports fell 29.7 per cent to $32.7 billion in April as the steps taken to slow the spread of the pandemic forced shutdowns in the manufacturing sector while retailers closed and energy prices fell.

Imports dropped 25.1 per cent to $35.9 billion, their lowest level since February 2011.

In volume terms, exports were down 19.9 per cent in April and imports fell 24.8 per cent.

"April's steep drop in international trade is consistent with the freeze in economic activity seen both here and globally," TD Bank economist Omar Abdelrahman wrote in a note.

"With the focus now shifting to the recovery stage, and with many economies gradually re-opening since May, the worst is hopefully in the rear-view mirror."

However Abdelrahman said the expected recovery in international trade will be gradual.

"With the autos category contributing disproportionately to April's decline in both exports and imports, a gradual rebound should support a modest improvement in the headline figures starting in May, albeit one that is unlikely to come close to year-ago levels."

Statistics Canada said the motor vehicles and parts sector showed the largest decreases in both exports and imports.

The value of exports in the sector dropped to $1.1 billion in April compared with $6.4 billion in March as motor vehicle assembly plants in Canada shut down. Imports of motor vehicles and parts fell to $1.9 billion in April from $8.2 billion in March.

The United States contributed the most to the drop in trade as exports to the United States fell 35.7 per cent and imports dropped 35.3 per cent.

Canada's trade surplus with the United States narrowed to $2.2 billion in April from $3.5 billion in March.

Exports to countries other than the United States fell 11.7 per cent, while imports from non-U.S. countries dropped 6.3 per cent as Canada's trade deficit with them increased to $5.4 billion in April from $5.1 billion in March.

On the services side of the economy, Statistics Canada said monthly exports of services fell 20.5 per cent to $8.1 billion in April, while imports of services fell 30.7 per cent to $7.8 billion.

Canada's trade deficit with the world for goods and services combined totalled $2.9 billion in April.

This report by The Canadian Press was first published June 4, 2020.

News from © The Canadian Press, 2020