By John Morrissy, Postmedia NewsNovember 10, 2011
OTTAWA - An unexpectedly strong month for energy exports returned Canada's trade balance to a surplus in September, breaking a strong of seven monthly deficits, Statistics Canada reported Thursday.
As a result of a 4.2 per cent advance in overall exports, Canada's trade balance rose to a surplus of $1.2 billion from a downwardly revised deficit of $487 million in August, the federal agency said. Imports, meanwhile, fell 0.3 per cent.
Economists polled by Bloomberg had called for a monthly trade deficit of $560 million.
The Canadian dollar rose after the report's release, and was up 33 basis points to 98.21 cents US in early afternoon trading.
``Even in times of uncertain global growth, Canadian exporters get the odd ray of hope,'' said CIBC World Markets economist Emanuella Enenajor.
She, like other commentators, said the trade figures will contribute meaningfully to a rebound in third-quarter growth, removing any doubt Canada would post two consecutive negative quarters and fall back into recession.
Enenajor forecast that third-quarter growth will come in at three per cent annualized, while economist Shahrzad Mobasher Fard at TD Economics said the report ``presents another upside risk to our economic growth forecast of two per cent in the third quarter.''
In the second quarter, growth contracted by 0.4 per cent.
Exports in September rose to $39.7 billion, the highest value since October 2008 as six of seven sectors posted gains in September, Statistics Canada said.
Energy exports rose 11.3 per cent to $9.6 billion, while automotive exports climbed 5.6 per cent to $4.8 billion and industrial goods and materials rose 3. 4 per cent to $10.47 billion.
Statistics Canada cautioned, however, that much of September's gains were a result of prices, which rose 3.9 per cent, while volumes edged up only 0.3 per cent.
Moreover, economists don't expect September's figures to carry through into the coming months.
Economist Derek Holt at Scotia Capital said much of the month's strength resulted from an end to temporary refinery shutdowns and the accompanying one- time surge in energy exports
``With the global economy slowing into Q4, don't expect trade to repeat its strong performance,'' added Sherry Cooper, chief economist at BMO Financial Group.
The report showed that Canada made progress in reducing its reliance on the U.S., the country's largest trading partner, as exports to countries other than the United States rose 2.3 per cent to $11.5 billion, the fifth consecutive monthly increase.
An accompanying 0.7 per cent rise in imports resulted in Canada's trade deficit with countries other than the United States falling to $3.1 billion in September from $3.3 billion in August, the lowest level so far this year.
Meanwhile, Canada's trade surplus with the United States rose to $4.4 billion in September from $2.8 billion in August as exports to the U.S. climbed five per cent to $28.2 billion, the highest value since January 2011. Imports from the United States decreased one per cent to $23.8 billion.
http://www.canada.com/business/Surging+energy+exports+restore+Canada+trade+surplus/5691726/story.html
1 comment:
A surge in energy exports has counteracted the trade deficit and returned Canada to a trade surplus. Energy exports rose in September to $39.7 billion mostly as a result of a price increase and a smaller volume increase. While the U.S. is still Canada’s largest trading partner, Canada has made friends abroad. This report proves this because Canadian exports to countries other than the United States increased for the fifth consecutive month by 2.3 per cent. This figure is somewhere around $11.5 billion. More exporting with other countries, coupled with a 5 per cent rise in exports to the U.S. has propelled this month’s trade into a surplus. Diverse trading partners are important to the maintenance of a trade surplus even if one partner has a bad month.
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