Canada's Trade Surplus With the Rest of the World Widened More Than Expected in February, Driven by Record Gold Shipments That Supported the Strongest Export Growth in Six Months.
The country recorded a merchandise trade surplus of 1.39 billion Canadian dollars, approximately 1.03 billion U.S. dollars, as reported by Statistics Canada on Thursday. It marks the second consecutive monthly surplus and exceeded the 675 million Canadian dollars expected by economists.
The surplus in January was revised upwards by 112 million dollars to 608 million dollars, a reversal from the deficit of 400 million dollars in the last month of the previous year.
The translation of the heading to English is:
"Goods exports jumped last month by 5.8% to 66.62 billion Canadian dollars, outpacing the increase in imports of 4.6% to 65.23 billion Canadian dollars, the highest level since last June, said the authority."
The strength in both imports and exports is a positive signal for the gross domestic product at the industry level, which Statistics Canada estimates grew by 0.4% in February over the previous month, following stronger-than-expected growth of 0.6% in January. Previously released data from the agency suggests a further strengthening of factory trade and wholesale sales in February.
Stephen Brown, Deputy Chief Economist for North America at Capital Economics, said that net trade has contributed the majority to an expected acceleration of GDP growth for Canada, which he estimates at 2.5% for the first quarter of the year, compared to about 1% annualized in the previous quarter.
Although exports have increased in nine of the 11 tracked product categories, over half of the growth in February was driven by exports of unprocessed gold, including high-value shipments of refined gold and wealth transfers in the banking sector in a month when the gold price rose sharply. Statistics Canada said that without the precious metal, exports would have risen by 2.8% compared to the previous month.
On a price-adjusted basis, total exports increased by 6.2% in the month, indicating strong growth in export volumes.
The exports of agricultural products, fishery products, and intermediate foodstuffs increased by 9.7%, the steepest rise since July, partly thanks to a recovery of wheat shipments. The exports of motor vehicles and parts also increased, although the level is still below the peaks of October and November, as the conversion of some facilities continues to constrain vehicle production in the country.
The imports recovered from the decline in January, with all segments except metal and non-metallic mineral products recording growth. In volume terms, total imports increased by 4.1% in February month-on-month.
Exports to the USA, Canada's Largest Export Market, Increased by 3.3%, While Imports Rose by 3.4%. As a Result, Canada's Surplus with Its Neighbor Slightly Widened to 9.08 Billion Canadian Dollars from 8.82 Billion Dollars in the Previous Month.
Exports to Countries Outside the US Jumped by 14.2% in February, Mainly Thanks to Shipments of Unprocessed Gold to Switzerland and the United Kingdom. Imports from Countries Outside the US Rose by 6.7%, with the Largest Increases Seen in Various Products from China, Aircraft from the United Kingdom, Scrap and Non-ferrous Metals from Indonesia, and Cars and Light Trucks from South Korea.
When International Goods Trade and International Services Trade Were Combined, Canadian Exports Rose by 5.0%, While Imports Increased by 3.7%. As a Result, Canada's Trade Surplus, Including Both Goods and Services, Swung to a Surplus of 367 Million Canadian Dollars from a Deficit of 595 Million Dollars in January.
