In a positive turn of events, Canada's goods-trade swung to a surplus in August, marking the first surplus in the past four months. This recovery was largely attributed to the end of a port-workers strike on the West Coast and a significant increase in the value of energy exports.
Surplus Surprises Economists
The latest data released by Statistics Canada revealed that the country posted a merchandise-trade surplus of 718 million Canadian dollars (equivalent to about $522.3 million). This outcome defied economists' expectations, as they had forecasted a deficit of C$1.41 billion, according to TD Securities.
Additionally, July's deficit was revised down from $550 million to $437 million, suggesting an even stronger recovery.
Exports and Imports Rebound
The data agency's report highlighted that goods exports saw a considerable increase of 5.7% in August, reaching C$64.56 billion. In contrast, imports rebounded from a sharp decline in the previous month and rose by 3.8% to C$63.84 billion.
When considering the real or volume terms, exports experienced a 3% growth, while imports increased by 1.2%. This indicates that prices played a significant role in driving the monthly movements.
Energy Sector Drives Exports
Crude oil and unwrought gold emerged as the primary drivers behind the surge in exports. However, excluding these two commodities, exports remained relatively unchanged during the month, according to Statistics Canada.
The value of energy-product exports witnessed an impressive rise of almost 15% in August. This increase was primarily driven by rising market prices for oil, which have been influenced by expectations that certain members of the Organization of the Petroleum Exporting Countries (OPEC) and its partners would continue their production restrictions.
Record-Level Exports for Metal and Mineral Products
After experiencing three consecutive monthly declines, exports of metal and mineral products skyrocketed in August, reaching a record level. One of the factors contributing to this achievement was the substantial number of gold shipments to the U.S., alongside an increase in gold asset transfers within the banking industry.
In summary, Canada's goods-trade showcased a remarkable recovery in August, boasting its first surplus in four months. The end of the port-workers strike and the surge in energy exports played pivotal roles in this positive outcome.
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