In January, Canada posted a trade surplus of $799 million with the rest of the world, building on a $75-million surplus in December 2009.
According to Statistics Canada, merchandise exports grew 0.5 percent to $33 billion in the first month of 2010, while imports declined 1.7 percent to $32.2 billion.
When it comes to Canada’s largest trading partner, activity slowed in January. Exports to the US were down 0.6 percent while imports from the US declined 0.5 percent. As a result, Canada logged a $4.2 billion trade surplus with the US—almost unchanged from $4.2 billion in December.
Exports edged up in January, while imports fell. Source: Statistics Canada. Click the image to enlarge.
Export growth slowing
While January marked the fifth straight month of export growth, several factors—namely, sluggish performance in the automotive and machinery/equipment sectors—caused the pace to slow.
After two months in decline, exports of industrial goods and materials increased 4.8 percent, buoyed mainly by higher volumes of metals and alloys. Exports of chemicals, plastics and fertilizers were also strong.
Consumer goods exports increased nine percent, the largest month-to-month percentage gain in the sector since December 2008. The January uptick partially offset a decline in December.
On the other side of the ledger, exports of automotive products fell 4.1 percent, while machinery and equipment exports dropped 1.5 percent.
“Following two quarters of above average growth, it appears that momentum in export growth has now begun to slow,” commented Diana Petramala, an economist with TD Economics.
“The slowing in export growth was not unexpected and can likely be chalked up to two events: the deceleration in the US economy as the inventory restocking stateside starts to wind down, and the end of the very popular US cash for clunkers program.”