Economy gets boost in Q2 from big improvement in trade
Merchandise exports rose 1.1% in June to a record high of $45.2 billion.
Oil & Gas
OTTAWA — Canada’s economy racked up a solid trade surplus during June as exports hit a record level due to a strong showing from the energy sector.
Statistics Canada said that Canada’s trade surplus with the rest of the world came in at $1.9 billion, up from a revised $576 million in May, and exceeding the $150 million deficit that economists had generally expected.
“The big swing back to a trade surplus, the fourth in the past five months, is certainly welcome news and marks the second straight quarterly surplus following two years of deficits,” said BMO Capital Markets senior economist Benjamin Reitzes.
“It looks as though trade is going to add more to (economic) growth in the second quarter than previously expected.”
The agency reported that merchandise exports rose 1.1% in June to a record high of $45.2 billion.
Strong performers included the energy sector, as exports of energy products ran up 2.5% to $11.9 billion. Crude oil and crude bitumen increased 2.8% to a record high of $8.9 billion, as prices rose 2.2%.
The mining sector was also a major contributor to the trade surplus, while exports of metal and non-metallic mineral products increased 9.7% to $4.8 billion as volumes rose 10.2%.
Exports of consumer goods rose 8.3% to $5.1 billion on higher volumes.
The trade picture improvement came despite a disappointing showing in the auto sector.
Exports of motor vehicles and parts fell 6.3% to $6.2 billion in June after recording four consecutive monthly gains.
“The main factor behind the decrease in June was passenger cars and light trucks, which fell 8.8% to $4.1 billion,” Statistics Canada said.
Imports fell 1.8%, namely imports of metal ores and non-metallic minerals, which fell 25.3% to $752 million. There were also declines in electronics, down 4.5% and auto imports, which fell 2.5% to $7.6 billion.
Exports to the US remained unchanged at $34.1 billion in June, while imports were up 1.5% to $29.1 billion – a record high.
Exports to countries other than the US grew 4.8% to $11.1 billion, led by the European Union, while imports fell 7.8% to $14.3 billion.
The blowout trade number also had a positive effect on the Canadian dollar, which had been lower early Wednesday morning with traders avoiding risk amid growing tensions between Russia and Ukraine.