Canada posts trade surplus on U.S. strength
By David Ljunggren
OTTAWA (Reuters) - Canada posted an unexpected trade surplus in November as a strengthening U.S. economy helped push exports to a three-year high, offering hope to a hard-hit sector.
Trade is a major driver of the economy and Canada sends about 70 percent of its exports to the United States. A prolonged U.S. recovery would help exporters who have to deal with a strong Canadian dollar and uncertain overseas markets.
Canada recorded a trade surplus of C$1.07 billion ($1.05 billion) in November, pleasantly surprising analysts who had expected a C$500 million deficit. October's deficit of C$487 million followed a C$1.12 billion surplus in September.
"The improvement seen in two of the past three months is consistent with the better economic data we've seen from our neighbor to the south," said Benjamin Reitzes of BMO Capital Markets Economics.
"The surplus is certainly welcome news, but its staying power is largely dependent on whether the U.S. economy continues to pick up steam."
Exports to the United States increased by 1.9 percent while imports dropped by 2.0 percent, pushing Canada's bilateral trade surplus up to C$4.57 billion from C$3.55 billion in October.
Overall exports jumped by 3.2 percent from October to C$40.09 billion, the highest level since the C$41.98 billion recorded in October 2008. Energy exports climbed by 6.4 percent, with crude petroleum hitting a record C$6.38 billion.
Peter Hall, chief economist at Export Development Canada, a federal agency that assists exporters, noted a recent trend of strong sustained orders from the United States. Continued...