Canada swings to trade surplus on export surge

Thu Apr 3, 2014 10:49am EDT
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OTTAWA (Reuters) - Canada reported a small trade surplus, its first in five months, in February as exports bounced to their highest since before the 2008 recession, welcome news for the central bank but likely not enough for it to declare a full-blown export recovery.

Statistics Canada reported a surplus of C$290 million ($264 million) for February on Thursday, against forecasts for a C$200 million surplus. In January the trade deficit was C$337 million.

The report was the latest piece of upbeat data on the Canadian economy following a weak start to the year, but analysts still see net exports making a very small contribution to economic growth in the first quarter.

"Despite the decent rebound in exports and only small increase in imports, it looks as though trade will struggle to add to growth in the first quarter," Benjamin Reitzes, senior economist at BMO Capital Markets, said in a note to clients.

Imports jumped 2.1 percent in the month to a record high of C$42.06 billion on increases in shipments of energy products, autos, and machinery and equipment.

But they were overshadowed by a 3.6 percent surge in exports to C$42.35 billion on shipments of motor vehicles and parts, and crude oil and bitumen.

The last time exports were above that level was in August 2008, following a historical peak in July of that year.

Overall exports in February increased 2.2 percent in volume and prices rose 1.4 percent.

Exports to the United States, by far Canada's biggest market, shot up 4.4 percent in February and were also at the highest level since July 2008.   Continued...

A truck is loaded with a container at the Port of Montreal, September 27, 2010. REUTERS/Shaun Best