Oil rally helps push Canada to biggest monthly trade surplus since 2008

Canada’s merchandise trade surplus grew to $5.3 billion in May, which is the largest trade surplus since August 2008, Statistics Canada says.

The agency said Thursday the result was up from a surplus of $2.2 billion in April.

Exports rose 4.1 per cent to $68.4 billion as shipments of energy products gained 5.7 per cent. Canada exported more than $20 billion worth of energy products like oil during the month. That was 29.8 per cent of everything the country exported during the month, an all-time high.

There was booming demand for other commodities, too, including record high exports of Canadian potash.

“Russia is the largest exporter of fertilizers in the world, and amid the conflict in Ukraine, demand for fertilizer products exported by other countries has risen,” Statistics Canada said.

The aircraft and other transportation equipment and parts category gained 34.2 per cent to $524 million, thanks to a surge in sales of business jets to the U.S. market.

Fewer imports

On the other side of the ledger, Canada imported less from the rest of the world, with imports falling 0.7 per cent to $63.1 billion. A 4.7 per cent drop in the importation of consumer goods was the main factor to the downside

Stephen Brown, an economist with Capital Economics, said most of the large trade surplus can be chalked up to booming demand for Canadian commodities like oil, food, and metal and minerals. While he doesn’t expect demand to remain as high as it has been, he does think we won’t see a trade deficit for a while at least.

“We expect commodity prices to remain relatively high [so] we doubt Canada will return to running trade deficits any time soon,” he said.

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