March exports hit record high as trade deficit narrows
Driven by gains in energy and advances in consumer goods.
OTTAWA — The energy and consumer goods sectors helped Canadian exports rise to a record high in March as the country’s trade deficit narrowed to $135 million, Statistics Canada said.
Economists had expected a deficit of $800 million, according to Thomson Reuters.
“This is a solid report,” said Benjamin Reitzes, Canadian rates and macro strategist at BMO Capital Markets.
The shortfall followed a revised deficit of $1.1 billion for February compared with an initial reading of a deficit of $972 million for the month.
Gains in eight of 11 sectors in March helped exports rise 3.8% to $47 billion, while volumes gained 2.5% and prices increased 1.3%.
Driving the gain was a 7% increase in energy exports to $8.7 billion. A boost in natural gas exports attributable to cold temperatures in the northeastern United States and increased coal exports to Asia were both factors.
“Combined with a continued creep higher in crude prices, look for energy to continue being a catalyst in supporting Canadian exports,” CIBC economist Nick Exarhos wrote in a report.
Consumer goods exports also gained ground, climbing 6.8% to $6.1 billion. Exports of other food products led the increase with a gain of 11.9% to a record $1.4 billion, boosted by exports of yellow peas and red lentils to India.
On the other side of the equation, imports increased 1.7% to $47.1 billion with gains in seven of 11 sectors. Prices rose 1.9% and volumes fell 0.2%.
Statistics Canada said higher imports of metal and non-metallic mineral products, industrial machinery, equipment and parts, and motor vehicles and parts were the main contributors.
Metal and non-metallic mineral product imports grew 10.4% to $4.0 billion as unwrought precious metals and precious metal alloys rose 61.1%.
Imports of industrial machinery, equipment and parts increased 4.1% to $4.4 billion, while motor vehicles and parts gained 1.5% to reach a record high $9.3 billion.
On a regional basis, Canada’s trade surplus with the US slipped to $4 billion in March compared with $4.5 billion in February.
Exports to the US edged up 0.1% to $34.4 billion, while imports from increased 2% to $30.4 billion.
Meanwhile, Canada’s trade deficit with countries other than the United States narrowed to $4.1 billion in March from $5.6 billion in February.