Gloomy Canada trade data perplexes analysts

Thu Apr 12, 2012 4:26pm EDT
 
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By David Ljunggren

OTTAWA (Reuters) - Canada reported a much smaller than expected trade surplus for February on Thursday as auto exports to the United States fell, puzzling analysts who cited healthy U.S. vehicle sales so far this year.

Statistics Canada said the surplus dropped to just C$292 million ($292 million) from a revised C$1.95 billion in January. The figure was much less than the C$1.90 billion forecast by market operators.

Exports sank by 3.9 percent as shipments of energy products dropped by 6.9 percent, while automotive products fell 11.9 percent after five consecutive monthly increases.

"Autos don't really stack up to what's going on in U.S. sales at the moment so it's a bit of a head scratcher," said Peter Hall, chief economist at Export Development Canada, a federal agency.

"I think what we're talking about is sort of a pause, maybe a pause that refreshes here ... I think the March data are going to come along and erase a lot of the negatives that we see in this month," he told Reuters.

U.S. auto sales rose about 13 percent in March, rounding out the best quarter since 2008. The U.S. and Canadian auto industries are highly integrated.

Douglas Porter, deputy chief economist at BMO Capital Markets, said the lower surplus was disappointing and that the 11.9 percent drop in exports of automotive products was "a bit of a shock".

He said the underlying trend in Canadian trade had still strengthened since last year, when big deficits were reported.   Continued...