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Canadian Merchandise Trade Surplus Up In March

ByThe National Bank of Canada
Published 05/13/2012, 07:14 AM
Updated 05/14/2017, 06:45 AM
Facts

: Canada’s merchandise trade surplus rose marginally to CAD 0.35bn in March (top chart), a touch below consensus expectations. Exports fell 0.4%, the third drop in a row, with gains in industrial goods, machinery and equipment being more than offset by declines elsewhere (including the 8.9% drop in energy). Imports fell faster with a 0.6% decline driven by energy imports (-14.9%) which largely offset increases in other categories. In real terms exports rose 1% (after a 3% drop in February) while imports were up 0.6%. For the quarter as a whole, the merchandise trade surplus was CAD 2.6 bn, a $1.1 bn drop from Q4’s tally.
Canada Goods trade surplus rises a bit in March
Opinion: March’s report was better in the details. While nominal exports and imports fell, that was entirely because of prices. Volumes for both imports and exports were stronger in the month. With March’s gains, Q1 real exports grew at an annualized pace of 10%, almost double the pace of import volumes. So trade is likely to be a contributor to Q1 GDP (middle chart). Also uplifting is the increase in real imports of machinery and equipment in Q1 (+3.4% annualized) pointing to decent business investment in the quarter (bottom chart).
Canada Trade likely a contributor to Q1 GDP
There is room for further improvement in the trade balance. Exports of autos and parts, which have moderated since January, should bounce back particularly if vehicle sales in the US remain solid. More generally, an expanding US economy and improving demand can only be good for Canadian trade. And there’s reason to be optimistic in that regard, with the US’s own trade numbers for March showing strong imports of consumer goods in particular.
Canada Business investment on the rise in Q1

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