Canada: Trade surplus hits four-year high – NBC

National Bank of Canada’s (NBC) Jocelyn Paquet reports Canada’s merchandise trade surplus in goods reached a four-year high of C$3.86 billion in June, beating expectations. Exports rose for a fifth consecutive month to a record C$77.5 billion, driven by strong Gold and copper shipments, while energy exports fell. Quarterly data suggest merchandise trade made a strong contribution to Q2 Gross Domestic Product (GDP) growth.

Record exports and shifting composition

"Excluding gold and copper, exports were down by as much as 3.0% during the month, as falling commodity prices amid easing tensions in the Middle East led to a 10.0% decline in the energy segment."

"A study of quarterly trade volumes hints at a strong contribution to Q2 GDP growth from merchandise trade, with exports (+28.5% q/q ann.) growing at a much faster pace than imports (+10.6%)."

"Meanwhile, the increase in import volumes in the machinery and equipment category (+9.6%) suggests that business equipment spending may also have had a positive impact on growth during the quarter."

"Since the United States is the primary destination for our energy exports, it was perhaps not surprising to see the merchandise trade surplus with our southern neighbour narrow in June."

"Canada's merchandise trade surplus reached a four-year high in June, as exports rose for the fifth consecutive month and hit an all-time high of C$77.5 billion."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)