MNI 5 THINGS:Cdn Trade Gap At Record High On Strong Imports>

--5 Things We Learned From Canadian Merchandise Trade Data

By Yali N'Diaye

     OTTAWA (MNI) - The following are the key points from the March data 

on the Canadian merchandise trade data released Thursday by Statistics 

Canada: 

     - The goods trade deficit widened to a record C$4.1 billion in 

March, while analysts in a MNI survey had expected a gap of C$2.3 

billion. Import growth (+6.0%) far outpaced export growth (+3.7%) during 

the month. 

     - Imports reached a record C$51.7 billion, supported by strong 

volumes (+5.3%). Gains were widespread across 9 of 11 categories, led by 

motor vehicles and parts (+8.3%) and consumer goods (+7.7%). Imports 

excluding autos and parts rose 5.4% and they increased 5.5% excluding 

consumer goods for which the gain was "atypical". 

     - Exports were also widespread, led by aircraft and other 

transportation equipment (+24.3%), farm, fishing and intermediate food 

products (+14.7%), and energy (+4.2%). Exports excluding energy rose 

3.6% on the month after a 1.0% gain in February. Regionally, exports to 

the U.S. rose 1.2% and imports were up 3.1%, shrinking the trade surplus 

with the U.S. to C$1.7 billion, the smallest since June 2016. The 

deficit with non-US countries widened to C$5.8 billion from C$5.2 

billion. 

     - In real terms, exports rose 3.0% in March, but only edged up 0.3% 

in the first quarter after rising just 0.6% in the fourth quarter 2017. 

Real imports rose 1.5% in the first quarter after a 1.6% gain, leading 

the real trade deficit to widen to C$5.4 billion from C$4.0 billion. 

     - While March deficit was much wider than expected, it did not 

challenge the Bank of Canada's scenario of a strengthening in exports, 

since the latter still accelerated (+3.7% after +0.3% in February). In 

addition, imports of industrial machinery and equipment and parts rose a 

further 3.2% after a 2.1% advance in February, a positive sign for 

investment activity in Canada. That being said, the data did not bode 

well for net export contribution to the first quarter GDP. 

--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

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