Canada posts surprise August trade surplus, rebounding after port closures
Reuters
Published Oct 05, 2023 08:44
Updated Oct 05, 2023 10:04
By Ismail Shakil and Steve Scherer
OTTAWA (Reuters) -Canada posted a surprise C$718 million ($521.88 million) trade surplus in August as trade rebounded a month after labor strikes shut down ports on the West Coast, data showed on Thursday.
Transfers of gold to the United States and higher crude prices helped exports outpace a rise in imports, Statistics Canada said.
Analysts in a Reuters poll had forecast a C$1.5 billion deficit. July's shortfall was revised to C$437 million from C$987 million.
Total exports increased 5.7%, while imports were up 3.8%, with both benefiting from higher prices in August, Statscan noted. By volume, exports rose 3% and imports increased 1.2%.
The surge in exports was the biggest since October 2021 and driven by precious metals and energy products.
"After the port closures, today's story is really a good story... as the trade balance recovers from three consecutive months of decline," said Prince Owusu, a senior economist at Export Development Canada. The trade numbers "probably will be a contributing factor to growth in Q3."
Canada's second-quarter growth shrank, and gross domestic product stalled in July while ticking up only slightly in August.
Exports of metal and non-metallic mineral products rose to a record C$8.5 billion in the month, due in part to higher exports of gold to the United States, Statscan said, adding that gold asset transfers in the banking sector contributed the most to the monthly movement.
The value of energy product exports increased 14.6% in August, with crude oil exports the largest contributor.
"Stronger-than-expected volumes suggest merchandise trade could add to third quarter growth," said Shelly Kaushik, an economist at BMO (TSX:BMO) Capital Markets. "Even so, the economy is expected to slow meaningfully in the second half of the year."
Total imports benefited from imports of industrial machinery, equipment and parts, active pharmaceutical ingredients from Switzerland as well as fertilizers, pesticides and other chemical products.
($1 = 1.3758 Canadian dollars)
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Written By: Reuters
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