Canada’s merchandise trade exports declined for the first time in five months in September, as falling energy prices depressed the value of exports, Statistics Canada said today.

In addition, imports dropped for the second month in a row, primarily because of a slowdown in auto imports.

Canadian companies exported merchandise worth $37.9 billion in September, down 2% from August. Imports fell 1.6% to $33.9 billion.

A 4% drop in exports to the United States accounted for September’s overall decline. Exports to the United States fell to $29.2 billion as two principal commodities, energy products and automotive products, registered declines. Imports from the United States were down 1.9% to $21.9 billion, as importers in Canada also ordered fewer automotive products from across the border in September.

Canada’s overall merchandise trade surplus narrowed to $4 billion in September from $4.2 billion in August, as the surplus with the United States fell to $7.3 billion while the deficit with the rest of the world shrank to $3.3 billion.

The surplus with the United States has followed a downward trend since it hit $11 billion in October 2005. After increasing steadily to a record $4.5 billion in April 2006, the deficit with the rest of the world has since changed direction, shrinking as exports have outpaced imports.

Exports to the rest of the world increased by 5.2%, hitting a record $8.7 billion, as metal exports to non-US destinations, such as Norway and South Korea, increased further in September. Imports from countries other than the United States fell 1.1% to $12.0 billion, as imports of metals returned to normal levels following a jump in August.

Trade data also show that Canada’s imports from China, the nation’s second largest supplier of imported goods, hit $24.9 billion during the first nine months of 2006, up 17.2% from the same period last year.

StatsCan said export values for energy products fell as prices for natural gas and crude petroleum weakened, while the drop in auto exports stemmed from a production slowdown.

Exports of energy products declined 6.5% to $7.2 billion, with a moderate decline in crude petroleum exports accompanying a sharp drop in natural gas exports.

Imports weakened in September, with losses being recorded in automotive products as well as industrial goods, machinery and equipment, energy products and forestry products.

Imports of automotive products fell 6.9% to $6.4 billion in September, the second consecutive monthly decline for the sector. Although the drop was most pronounced for imports of passenger cars (-14.1%), imports of trucks and parts were also down, falling 9.8% and 0.2% respectively. Imports of motor vehicle parts posted a much larger decrease of 8.7% the month previous.