Canada: Trade back in surplus in May - RBC

Nathan Janzen, senior economist at Royal Bank of Canada, points out that Canada’s trade balance unexpectedly swung to a surplus in May as exports surged 4.6% while import volumes rose 1.3%.

Key Quotes

“The Canadian net trade numbers are notoriously volatile and revision-prone. And part of the swing in the trade balance to a $0.8 billion surplus – the first positive balance since July 2018 – was due to one-off factors that won’t be repeated.”

“We don’t expect the surplus position will last.  Still, the recovery in export volumes over the last couple of months just adds to the list of evidence that economic growth bounced-back in Q2 after transitory factors (bad weather, Alberta oil production curtailments) held back growth over the winter.  An increase in equipment imports in May also is a positive sign for Canadian business investment.”