MNI 5 THINGS:Subdued Exports,Imprt Rebound Widen Cdn Trade Gap>

--5 Things We Learned From Canadian Merchandise Trade Data

By Yali N'Diaye

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

data on the Canadian merchandise trade data released Thursday by 

Statistics Canada: 

     - The goods trade deficit widened to C$2.7 billion, while analysts 

in a MNI survey had expected a gap of C$2.2 billion. The combination of 

subdued exports and an import rebound widened the trade gap from C$1.9 

billion in January. 

     - Exports rose just 0.4%, with volumes rising 0.6%, led by autos 

and parts (+5.0%) and aircraft and parts (+19.6%). Excluding autos and 

parts, exports contracted 0.5%. Energy exports were down 1.2%, and 

exports excluding energy rose 0.7%. Farm, fishing and intermediate goods 

fell 17.2%. 

     - The surprise was on the import front, with a rebound of 1.9% 

entirely based on higher volumes, after a drop of 4.3% in January. 

Energy imports rose 15.4% (volume +14.5%), while weakness in gold 

weighed on metal ores and non-metallic minerals (-11.9%). Industrial 

machinery, equipment and parts only recovered 1.3% from January's 11.2% 

fall, not an encouraging sign for domestic investment activity, 

especially since the volume was up just 0.2%. 

     - Regionally, exports to the U.S. rose 1.9%, the largest gain since 

last November, but not enough to offset decreases of 2.9% and 0.7% in 

January and December, respectively. Exports to non-US countries fell 

4.2%. 

     - In real terms, the trade deficit widened in February to C$1.8 

billion from C$1.3 billion in January, not boding well for the Bank of 

Canada's growth rotation scenario, especially considering the 

synchronized global growth conditions. 

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

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