Canada posts second trade surplus in a row, oil hides weakness

Tue Feb 7, 2017 9:28am EST
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By David Ljunggren

OTTAWA (Reuters) - Canada posted a second consecutive monthly trade surplus for the first time in more than two years in December, but booming oil exports obscured weakness in some key sectors.

The C$923 million ($699 million) surplus announced by Statistics Canada on Tuesday exceeded analysts' forecasts of a C$350 million positive balance. Statscan revised November's surplus up to C$1.01 billion from an initial C$0.53 billion.

Canada last recorded back-to-back monthly trade surpluses in August and September 2014.

But while overall exports rose by 0.8 percent in December, export volumes actually fell by 1.4 percent.

"This wasn't a good news story in the most recent month ... the feed through to December real GDP from these data will be on the soft side," said Avery Shenfeld of CIBC Economics.

Energy product exports jumped by 15.9 percent, the biggest month-on-month leap in six years, on strength in crude oil and bitumen.

Exports of motor vehicles and parts fell 5.2 percent to the lowest level since June 2015. Statscan said a higher proportion of Canadian-produced motor vehicles were destined for the domestic market.

Peter Hall, chief economist at Export Development Canada, noted there was no sign of a let-up in U.S. demand for autos and said overall he was pleased with the trade data.   Continued...

The Canadian Pacific railyard is pictured in Port Coquitlam, British Columbia February 15, 2015.    BUSINESS EMPLOYMENT) - RTR4PPD8