Canada posts trade surplus on US growth
OTTAWA CANADA posted an unexpected trade surplus in November as a strengthening US 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 US 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 neighbour 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 US economy continues to pick up steam.” Exports to the United States increased by 1.9 percent while imports dropped by 2 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.
“We’re joined at the hip to these guys and we’re capitalising on that ... it looks like the cork that’s been underwater for an awful long time is actually making a break for the surface,” he said.
The favourable data did not boost the Canadian dollar, which lost strength as its US counterpart rose on gloomy news from Europe.