Canada Posts First Trade Surplus Since May 2019 As Exports Surge

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January saw Canada post its first trade surplus since May 2019 as exports surged higher to start the year.

Statistics Canada is reporting that the surplus of $1.4 billion was the largest since July 2014, and compared with a revised deficit of nearly $2 billion in December. Economists on average had expected a deficit of $1.4 billion for January, according to financial data firm Refinitiv.

The trade report follows a flash estimate by Statistics Canada earlier this week that real gross domestic product rose 0.5% in January following growth of 0.1 per cent in December.

TD Bank economist Omar Abdelrahman said the strong international trade report joins a list of other indicators in suggesting a better-than-expected start to 2021 for the Canadian economy.

Total exports rose 8.1% in January to $51.2 billion, with increases in all product sections, while in real or volume terms exports increased 5.1%.

Exports of aircraft and other transportation equipment and parts rose 72.3% in January as Statistics Canada said a Canadian airline, which it did not identify, retired a large number of aircraft, resulting in their export to the United States.

Meanwhile exports of consumer goods increased 11.6% in January, helped by higher exports of gold bars to the United States, and exports of energy products rose 5.9%, helped by both higher prices and higher volumes of crude oil exports for the month.

On the other side of the equation, imports increased 0.9% in January to $49.8 billion, while in real or volume terms they gained 1%.

Imports of energy products rose 20%, while imports of electronic and electrical equipment and parts increased 2.9%.

The overall trade surplus for the month came as Canada’s trade surplus with the United States more than doubled to $6.2 billion in January, the largest surplus since September 2008. Exports to the United States rose 11.3%, while imports from the United States edged up 0.4% to $31.0 billion.

Meanwhile, Canada’s trade deficit with countries other than the United States increased to $4.8 billion in January compared with $4.5 billion in December.

(Source: Global News)