Canada: Energy trade surplus at an all-time high in March – NFB

Canada registered another trade surplus in March, although below expectations: CAD 2.49 billion vs CAD 3.90 billion. Analysts at the National Bank of Canada highlight the trade surplus with the US reached a fresh record high. 

Key Quotes:

“For the ninth time in the past ten months, Canada's trade balance remained in positive territory, with both exports and imports reaching all-time highs. Total trade (exports + imports) in the motor vehicles/parts category expanded the most in 5 months “as automakers experienced a reprieve from supply chain issues that have been limiting output for a number of months.” Despite this improvement, international exchanges in the auto sector remained 7.6% below their pre-pandemic level.”

“The energy sector, meanwhile, benefited from higher prices and uncertainty surrounding global oil supply. Imports mustered a second consecutive gain, while exports jumped 12.8%, propelling Canada’s energy trade surplus to a record level.”

“The trade surplus with the United States moved from C$10.9 billion to C$12.6 billion, another record.”

“Turning to quarterly data, trade in goods likely weighed on GDP growth in the first quarter of the year, as real exports (-2.5%) contracted at a slightly faster pace than real imports (-1.0%). The increase in import volumes in the machinery equipment category (+3.8%), meanwhile, bodes well for investment spending in Q1.”