Posted on 05/14/2003 9:02:54 PM PDT by Sweet_Sunflower29
May. 14, 2003. 01:00 AM
Trade surplus hits two-year high, surprising analysts
STEVEN THEOBALD
BUSINESS REPORTER
Despite the soaring loonie and a weak U.S. economy, Canada's March trade surplus ballooned to the highest level in almost two years.
The $5.9 billion merchandise trade surplus, up from an upwardly revised $4.8 billion in February, shattered the $4.5 billion level forecasters had expected. Exports jumped 2.8 per cent, to $35.9 billion, led by a 14.9 per cent surge in energy shipments, Statistics Canada reported yesterday.
Excluding near-record energy numbers, exporters eked out a 0.1 per cent gain in the month.
"Given all the bad economic numbers coming out of the U.S. in March, people were expecting to see much more of a drop on the non-energy side," said Todd Evans, an analyst with Export Development Canada.
The Canadian dollar, up more than 13 per cent since the start of the year, gained a further 0.17 of a cent yesterday, closing at 72.09 cents (U.S.).
Highlights of the March trade report include:
Exports to the U.S., which account for 84 per cent of the total, rose 2.6 per cent, to $30.2 billion.
Automotive exports fell 1.2 per cen t, to $7.6 billion.
Total imports declined 0.5 per cent from the previous month, with imports from the U.S. down 2.5 per cent.
Machinery and equipment imports climbed 0.9 per cent, reflecting a rise in investment spending by Canadian firms.
The trade surplus with the U.S. increased by $1.3 billion, to $9.4 billion.
Though the headline trade numbers were encouraging, the over-all report was negative, warned Marc Lévesque, senior economist at the Toronto Dominion Bank.
"While it would be comforting to assume that Canada's export sector somehow dodged the ongoing economic quagmire south of the border, a closer inspection of the data reveals otherwise. Outside of the energy sector, there wasn't much going on." In real terms, adjusting for price changes, Canada's exports in the first three months of the year fell 4.6 per cent compared with the fourth quarter of 2002.
Conversely, imports rose 4.7 per cent in the same period.
"It's indicative of the fact that Canada's domestic economy is doing better than the U.S.," Lévesque said. " We are sucking in imports and our exports are slipping."
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