View Issue #584 Now!
Canada Dec. trade surplus widens on export surge
Canada’s trade surplus grew to its widest level in 10 months in December, driven by stronger auto and energy exports, and painting a slightly rosier picture of fourth-quarter growth, Statistics Canada said.The surplus widened to C$4.98 billion ($4.24 billion) from a revised C$4.72 billion in November. The result beat the C$4.8 billion estimate of analysts polled by Reuters.
Exports in the month rose 3.8% to their highest level since December 2005, when energy prices soared after Hurricane Katrina.
Imports were up 3.6%, climbing for a third straight month to a fresh monthly high, helped by strength across all sectors, particularly in automotives which rose to a near-record high.
Growth in imports and exports both exceeded analysts’ expectations.
“Most will focus on the improved headline trade surplus,” said HSBC Canada strategist Stewart Hall.
“But what is more telling of the state of the economy is the overall run up in activity that is represented by the strong growth in both the export and import categories.”
The report, which was released concurrent with weaker-than-expected US trade data, pushed the Canadian dollar to its highest level in four weeks. It was at C$1.1680 to the US dollar, or 85.62 US cents, just before midday.
The trade figures, which come in the wake of Friday’s robust January jobs report, paint a slightly more positive picture of the economy in the fourth quarter, although analysts said they still expect anemic overall growth over the period.
The report is unlikely to influence the Bank of Canada’s near-term policy decisions, and the central bank is expected to leave interest rates steady for the foreseeable future.
“I don’t think it changes a whole lot. The bank is well aware that the export picture tends to be volatile… they still expect net trade to be a drag on growth in 2007,” said TD Securities bond strategist Marc Levesque.
However, he said revisions to the November data added to the positive tone of the report, particularly the upward adjustment to exports.
In all of 2006, imports grew almost four times as fast as exports, narrowing the annual trade surplus to C$53.63 billion from C$64.85 billion in 2005, a retreat triggered by limp US demand and the past appreciation of the Canadian dollar.
Canada’s exports to its top trading partner, the United States, fell for the first time in three years, but overall exports grew to a record annual high of C$458.17 billion.
“Canada’s trade surplus with the United States amounted to C$96.5 billion, the lowest value since 2003,” Statscan said in its report.
But trade with emerging economies China, India and Brazil expanded, with exports to those three countries advancing 17% in the year and imports up 14%. (Reuters)
American Journal of Transportation
116 Court Street, Suite 5
Plymouth, MA 02360
© Copyright 1999–2014 American Journal of Transportation.All Rights Reserved.