Canada trade surplus plummets as exports continue to struggle
By David Ljunggren
OTTAWA (Reuters) - Canada's trade surplus plummeted to just C$79 million ($72 million) in March from C$847 million in February as the long-suffering export sector showed little sign of permanent recovery.
March exports fell by 1.4 percent to C$42.7 billion on lower shipments of energy products, Statistics Canada said on Tuesday.
Imports edged up 0.4 percent to a record high C$42.6 billion on higher shipments of chemicals and plastic and rubber products.
The surplus was less than the C$130 million forecast by analysts. Statscan revised the February surplus sharply higher from an initial C$290 million to reflect the fact that natural gas prices were higher than it had initially estimated.
"Today's numbers still leave the quarter looking fairly miserable overall ... the impact from trade on GDP should be fairly neutral," Scotiabank Economics Vice President Derek Holt said in a note to clients.
Since the end of the recession, Canada's exporters have struggled with weak markets and a stronger Canadian dollar.
Bank of Canada Governor Stephen Poloz - who has long complained that weak exports are holding back the economy - said last month he was more hopeful than before about a recovery fueled in part by a U.S. rebound.
But Canada has yet to see the full effects of a stronger U.S. economy, and the central bank, noting weak export performance and inflation that is lower than expected, said its next interest rate move could be a cut. Continued...