It was an issue that was front-and-centre in the federal election taking place this month 23 years ago: expanding trade with the U.S. to provide merchants on this side of the border access to American markets, and vice versa. And while trade issues don’t overwhelm our consciousness the way stories of foreign debt do these days, such tidings still make their presence felt in the comings and goings of equity markets.
On Thursday, figures rolled in from Statistics Canada which denoted that this country was back in a surplus position of trading with the rest of the world, a position in which she hadn’t been for almost the entire year.
The nation’s number-crunchers said Canada’s September merchandise trade unexpectedly returned to a surplus position of $1.2 billion, with the deficit in August lowered slightly to half a billion dollars from a previously-estimated $600 million. The punch line is, experts expected a September deficit of $600 million.
Exports jumped $1.6 billion or 4.2%, with about a $100 million dip in imports (or 0.3%). The surplus was powered by an 11.3% hike in energy exports.
The drop in imports mainly reflected declines in automotive products of $300 million (5.5%) and in machinery and equipment of another $300 million or so (3.3%). The main offsets were in $200 million gains in both energy products (5.7%) and industrial goods (2.6%).
A report from the Royal Bank added that Thursday’s trade report implies net exports adding 4.8 percentage points to Q3 GDP growth and thus almost fully retracing the 5.7-percentage-point reduction in the second quarter.
"This add(ition) from net exports," the report continues, "is expected to return Q3 GDP growth rate back into the positive column after the disappointing 0.4% annualized decline in Q2.
"Our current Q3 forecast projects a 2.8% gain in the quarter."
