Canada trade surplus rises despite oil-price dip

Thu May 10, 2012 1:12pm EDT
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By David Ljunggren

OTTAWA (Reuters) - The value of Canada's imports and exports both dipped in March on weaker energy prices, but analysts said growing export volumes meant the outlook for trade was brighter than it looked.

Statistics Canada said on Thursday the trade surplus rose to C$351 million ($351 million) from $273 million in February as imports declined at a faster rate than exports.

The surplus was smaller than the C$500 million forecast by market analysts.

Exports fell by 0.4 percent, the third consecutive monthly decline, as energy shipments decreased by 8.9 percent on an 8.0 percent drop in prices. Imports were down 0.6 percent, also on weaker energy prices.

Exports are particularly important for Canada, accounting for about 31 percent of gross domestic product in 2011.

Analysts said the drop in energy prices was obscuring the larger picture and noted the volume of exports climbed 1.0 percent from February, while imports were up by 0.6 percent.

"Some softening in resource prices masked a decent trade performance overall for Canada in both March and for all of the first quarter," said Douglas Porter, deputy chief economist at BMO Capital markets.

Exports of industrial goods and machinery increased by 6.2 percent on higher volumes and prices, while exports of machinery and equipment grew by 3.4 percent on increased volume.   Continued...

A container ship port is enveloped in a morning mist at dawn inside the inner harbour of Vancouver, British Columbia May 4, 2008. REUTERS/Andy Clark