Canada's merchandise trade surplus jumped to $5.5-billion in March, its highest level since May 2007.
Canada's exports rose for the third consecutive month, increasing 1.6 per cent to $40.1-billion in March, largely on the strength of energy products, Statistics Canada reported Friday.
“The growth in exports overall was principally attributable to a rise in prices as volumes generally declined. Export prices have been on the rise since October, 2007,” Statscan said.
Exports to the United States – Canada's largest trading partner – rose for the third month in a row, while imports from the U.S. decreased. This boosted Canada's trade surplus with the U.S. to $8.6-billion, the highest level since April, 2006.
The trade deficit with countries other than the U.S. contracted to $3.1-billion, as exports increased at a much faster pace than imports, Statistics Canada reported.
The March surplus surpassed economists' expectations. The Bank of Montreal had expected the surplus to drop back to $4-billion after February's unexpected surge to $4.9-billion. Analysts in a Reuters poll had forecast, on average, a trade surplus of $4.5-billion.
Statscan reported that “the only export sectors to falter” were automotive and forestry products.
“After recording only five increases in the past 15 months, automotive products slid to $5.3-billion. Trucks and other motor vehicles exports plummeted 29.9 per cent to their lowest level in almost two decades, affected by labour disruptions in the United States,” Statscan said in its report.
However, energy products surpassed the $10-billion mark for the first time ever, rising 6.6 per cent.
“Price hikes for natural gas and crude petroleum, combined with a volume jump in petroleum and coal products, contributed to the increase.
“Contributing to a lesser degree to the growth in exports, other consumer goods rose 13.4 per cent. These have been on a downward trend since December 2006. Commodities such as pharmaceutical, household products, toys, sporting goods, apparel and footwear are grouped in this category. Typically, pharmaceutical products are the main contributor to the volatility of this sector.”
The forest products sector suffered from sluggish demand from the United States, Statscan reported. “Forestry products fell 7.7 per cent, continuing its decline that began in 2004. Exports of lumber and sawmill products fell to their lowest level since July, 1992 as the American housing market continued to deteriorate.”
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