Canada’s trade surplus widens in August as imports fall

FILE PHOTO: A truck moves past stacked shipping containers at the Port of Montreal

By Julie Gordon

OTTAWA (Reuters) – Canada’s trade surplus with the world widened in August, easily beating analyst expectations, as strong exports of energy products outweighed a drop a two-way trade for motor vehicles and parts, data showed on Tuesday.

The country’s trade surplus was C$1.94 billion ($1.54 billion) in August, well ahead of the average analyst estimate of a surplus of C$430 million and up from a surplus of C$736 million in July.

Exports rose 0.8%, led by energy products – which rose to their highest level since March 2014 – and metal and non-metallic mineral products, which outweighed a drop in motor vehicle and parts exports.

Imports, meanwhile, fell by 1.4%, mostly on a decline in motor vehicle and parts imports.

“As we expected, the global chip shortage continued to impact production in that (motor vehicle) sector,” said Royce Mendes, senior economist at CIBC Capital Markets, in a note.

“The fact that the wider-than-expected surplus was largely the result of more weakness in goods imports than anticipated will likely blunt any impacts from the data on the Canadian dollar,” he added.

The Canadian dollar was trading nearly unchanged after the data, at 1.2589 to the greenback, or 79.43 U.S. cents.

($1 = 1.2589 Canadian dollars)

(Reporting by Julie Gordon in Ottawa, additional reporting by Fergal Smith in Toronto; Editing by Andrew Heavens and Steve Orlofsky)