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OTTAWA – Canadian exports are finally beginning to show signs of a persistent recovery, with analysts cheered by healthy volumes in January that rose sharply thanks to the weak domestic dollar and continued U.S. growth.
Although Statistics Canada said on Friday the trade deficit had widened to $655 million from $631 million in December, markets paid much more focus on a 3.6 per cent begin volume.
“The long-awaited adjustment to the low dollar (and) firm U.S. consumer finally seems to be well arrived, and the strong U.S. jobs data suggests it may continue for a while yet,” BMO Capital Markets Chief Economist Doug Porter said inside a note to clients.
Analysts in a Reuters poll had predicted a shortfall of $1.05 billion. January marked the 17th consecutive monthly trade deficit, reflecting continuing economic damage caused by weak oil prices.
The crude slump, though, has helped depress the Canadian dollar making exports cheaper.
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The Bank of Canada, whose next scheduled rate of interest announcement is next Wednesday, continues to be counting on non-oil exports to assist counterbalance the sharp pullback in purchase of the energy sector caused by crude’s slide.
The worth of exports grew by 1.0 percent overall to some record $46.00 billion even while prices fell by 2.5 percent. When energy products were stripped out, the increase in the value of January exports was 2.3 percent.
“A very, very strong month, the 3rd one out of a row … it’s given us fantastic momentum entering this season,” Export Development Canada Chief Economist Peter Hall said inside a phone interview.
Imports climbed 1.1 percent to $46.65 billion as nine of 11 sections increased. Volumes expanded by 1.6 per cent while prices fell 0.5 per cent.
The Canadian dollar firmed around the data, touching $1.3392 to the U.S. dollar, or 74.67 U.S. cents, from $1.3416, or 74.54 U.S. cents.
Exports to the Usa, which accounted for 76 per cent of Canada’s global total in January, increased by 2.6 % while imports grew by 1.1 per cent.
As an effect, Canada’s trade surplus with the Usa grew to $3.70 billion from $3.13 billion in December.
Separately, Statscan said the labour productivity of Canadian businesses grew by just 0.1 percent within the fourth quarter of 2015, down from 0.4 percent in the third quarter.
? Thomson Reuters 2016
