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Canada posts C$762 mln trade surplus in May

Published 2019-07-03, 11:26 a/m
Canada posts C$762 mln trade surplus in May
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By Kelsey Johnson

OTTAWA, July 3 (Reuters) - Rising exports of motor vehicles, aircraft and energy products helped Canada post a surprise C$762 million ($582 million) trade surplus in goods in May, Statistics Canada reported on Wednesday - only the second surplus seen since December 2016.

The Canadian dollar rose slightly to 1.3085 against the U.S. dollar or 76.42 U.S cents.

Analysts in a Reuters poll had forecast a shortfall of C$$1.50 billion. Statscan revised April's deficit to C$1.08 billion from an initial C$966 million.

Statistics Canada said total exports rose 4.6% to a record C$53.1 billion in May. Exports of motor vehicles were up 12.4% in May to C$8.4 billion, thanks to increased shipments of passenger cars and light trucks after Canadian production increased.

"We think it's an excellent sign of the recovery in Canadian trade and we think this dramatic about face is probably likely to persist given what we've seen in the underlying data," said Ross Prusakowski, principal economist at Export Development Canada.

Exports of boats and other transportation equipment almost quadrulped in May in part because of higher demand for light armored vehicles from Saudi Arabia. Meanwhile, exports of aircraft jumped 40.2% because of increased shipments of business jets and commercial aicraft, particularly to the United States.

While the aircraft sector is known for being volatile, Prusakowski said Wednesday's data "does suggest that this is maybe of the export wave that we're expecting" following the announcement of new Airbus A220 contracts.

"Overall, even though some of the strength could prove transitory, the trade surplus is positive for tracking," Royce Mendes of CIBC Capital Markets said in a note.

On the energy front, exports of energy products rose 5.0% in May to C$10.8 billion, including a 2.8% jump in crude oil shipments, mainly on higher prices.

Canada sent 73.9% of all its goods exports to the United States in May. Exports to the United States rose by 3.7% to a record C$39.3 billion, while imports dropped by 0.5%.

As a result, Canada's bilateral trade surplus widened to C$5.9 billion in May from C$4.4 billion in April - the largest surplus since October 2008.

($1=$1.3097 Canadian)

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http://tmsnrt.rs/2e8hNWV

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