Gleam of economic optimism as Canadian exports see biggest surge since 2006

Canada’s trade deficit with the rest of the world shrank in June to a surprisingly low $476 million, as exports experienced the biggest one-month surge in 8 1/2 years.

TORONTO — Canada’s trade deficit with the rest of the world shrank in June to a surprisingly low $476 million, as exports experienced the biggest one-month surge in 8 1/2 years.

The value of Canada’s merchandise exports to other countries rose to $44.6 billion in June — up 6.3 per cent, the biggest one-month gain since December 2006 — and exports to the United States rose 7.1 per cent to $34.2 billion.

The total trade deficit — including a smaller decline in imports — was far less than the $3.4 billion gap in May, according to Statistics Canada figures released Wednesday. It is also below economist expectations of a $2.8 billion deficit, according to Thomson Reuters.

BMO Capital Markets economist Benjamin Reitzes said the solid June figures were likely making up for several months of weakness and probably won’t be repeated in July.

However, there’s reason to think the second half of this year will be better than the first half, driven by stronger U.S. economic growth and the weak Canadian dollar — which probably hasn’t had much impact yet on trade figures, Reitzes said.

“You’re starting, maybe, to see it in the June numbers.”

The Canadian dollar has recently traded near an 11-year low, hovering around the 76-cent U.S. mark. But Reitzes said it averaged above 80 cents U.S. throughout June and was above 90 cents U.S. as recently as a year ago.

“It takes a little bit longer,” Reitzes said. “It can take two to three years to see the full positive impact of the weaker currency.”

RBC senior economist Nathan Janzen said that forecasters have been counting on a boost in Canadian exports, especially to the United States, due to the competitive advantage of a weaker loonie — but it hadn’t really materialized earlier this year.

“We try not to read too much into one data point, but the June numbers would be consistent with exports starting to see some of the positive effects of a weaker Canadian dollar and an improving U.S. economy,” Janzen said.

He said the rise in June exports is also consistent with the Royal Bank’s view that Canada’s economy will start growing again in the third quarter, which began in July.

“With that said, when you look at the details of the (June) report, the rebound in exports was industries that were retracing some weakness earlier in the year,” Janzen said.

Nine of 11 sections showed increased exports, led by consumer goods as well as metal and non-metallic mineral products. Energy products increased 3.7 per cent to $7.9 billion in June, with prices up 4.5 per cent and volume down 0.7 per cent. Canadian exports excluding energy products were up 6.9 per cent in June.

Exports to countries other than the United States — by far Canada’s largest trading partner — rose 3.8 per cent to $10.4 billion.

Imports declined to $45.1 billion in June from $45.3 billion in May, with seven of 11 sections decreasing. Import volumes fell 0.9 per cent while prices were up 0.3 per cent. Imports from the United States declined 0.9 per cent to $29.5 billion.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Non-profits that are helping people impacted by COVID-19 can apply for relief funding

Red Deer and District FCSS can draw from a provincial pot of $30 million

Bank of Canada cuts key interest rate target while Libs up wage subsidy

OTTAWA — Canada’s central bank made yet another unscheduled rate cut Friday… Continue reading

A message from the Advocate publisher

In good times and bad, The Red Deer Advocate has been here… Continue reading

No Alberta renter will be evicted for non-payment on April 1, promises the premier

No evictions during the entire Alberta public health emergency

WATCH: COVID-19 doesn’t stop Red Deer Public Library from telling stories

Deb Isbister has been reading stories to children for more than 20… Continue reading

Alberta Health Services provides COVID-19 prevention tips

Alberta Health Services has a number of recommendations for people amid the… Continue reading

Alberta government website has latest COVID-19 statistics

Red Deer Advocate readers can stay up to date on the COVID-19… Continue reading

A message from Central Alberta Co-op

The COVID-19 pandemic is a global challenge that’s having a real impact… Continue reading

4 passengers dead aboard cruise ship anchored off Panama

4 passengers dead aboard cruise ship anchored off Panama

Drumheller Institution in Alberta locked down, two inmates tested for COVID-19

Drumheller Institution in Alberta locked down, two inmates tested for COVID-19

Alberta’s premier rejects call to fire health minister over abuse of citizens

Alberta’s premier rejects call to fire health minister over abuse of citizens

Trump boosts virus aid, warns governors to be ‘appreciative’

Trump boosts virus aid, warns governors to be ‘appreciative’

Marc Miller urges First Nations to delay elections during COVID-19 crisis

Marc Miller urges First Nations to delay elections during COVID-19 crisis

Most Read