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Growing Asian demand for Canadian energy and other commodities underpinned an expansion of Canada`s trade surplus in May – and could help offset the drag exerted by a slowing United States economy in the coming months, a Toronto-Dominion Bank economist said Friday.
“Canadian trade continues to confound expectations,” Charmaine Buskas said in a research note after Statistics Canada reported that Canada`s trade surplus expanded to $5.5-billion in May, from a revised $4.8-billion in April.
Exports to countries other than the U.S. surpassed $10-billion – “their highest level ever” – and exports to the U.S. remained strong, Statscan reported.
The surplus exceeded the market consensus of $5.3-billion, as overseas exports of coal, wheat and potash posted large gains.
“It is clear that the continued expansion of Asia has been a positive driver for Canadian trade in May,” Ms. Buskas wrote.
Because the U.S. remains Canada`s largest trading partner, it would be difficult for Canada to completely sidestep a downturn in the U.S., she said in an interview.
“But there is scope for strong Asian demand to pick up some of the slack where the U.S. leaves off, although not so much in the manufacturing sector, unfortunately,” she said.
Over all, Canadian exports rose for the fifth consecutive month, increasing 5.4 per cent to $42.1-billion, as both volumes and prices increased, Statscan reported. Imports increased 3.9 per cent to $36.6-billion, their largest increase since July, 2007, with volumes rising but prices declining.
Statistics Canada said exports to the United States increased for the fifth consecutive month, reaching $31.3-billion. But imports grew by almost the same dollar value as exports, leaving the trade surplus with the U.S. virtually unchanged at $8.1-billion.
Canada still imports more than it exports to countries other than the U.S., Statscan noted, but the trade deficit with those countries is narrowing.
“Since the growth in exports was twice as large as the rise in imports, the trade deficit narrowed to $2.5-billion from $3.3-billion. This growth was partially attributed to increased coal exports to Japan and South Korea, where it is used to produce steel,” Statscan said.
Growing Asian demand for Canadian energy and other commodities underpinned an expansion of Canada`s trade surplus in May – and could help offset the drag exerted by a slowing United States economy in the coming months, a Toronto-Dominion Bank economist said Friday.
“Canadian trade continues to confound expectations,” Charmaine Buskas said in a research note after Statistics Canada reported that Canada`s trade surplus expanded to $5.5-billion in May, from a revised $4.8-billion in April.
Exports to countries other than the U.S. surpassed $10-billion – “their highest level ever” – and exports to the U.S. remained strong, Statscan reported.
The surplus exceeded the market consensus of $5.3-billion, as overseas exports of coal, wheat and potash posted large gains.
“It is clear that the continued expansion of Asia has been a positive driver for Canadian trade in May,” Ms. Buskas wrote.
Because the U.S. remains Canada`s largest trading partner, it would be difficult for Canada to completely sidestep a downturn in the U.S., she said in an interview.
“But there is scope for strong Asian demand to pick up some of the slack where the U.S. leaves off, although not so much in the manufacturing sector, unfortunately,” she said.
Over all, Canadian exports rose for the fifth consecutive month, increasing 5.4 per cent to $42.1-billion, as both volumes and prices increased, Statscan reported. Imports increased 3.9 per cent to $36.6-billion, their largest increase since July, 2007, with volumes rising but prices declining.
Statistics Canada said exports to the United States increased for the fifth consecutive month, reaching $31.3-billion. But imports grew by almost the same dollar value as exports, leaving the trade surplus with the U.S. virtually unchanged at $8.1-billion.
Canada still imports more than it exports to countries other than the U.S., Statscan noted, but the trade deficit with those countries is narrowing.
“Since the growth in exports was twice as large as the rise in imports, the trade deficit narrowed to $2.5-billion from $3.3-billion. This growth was partially attributed to increased coal exports to Japan and South Korea, where it is used to produce steel,” Statscan said.