Canada’s trade balance changed direction in February, as the economy posted a trade deficit of $972 million after three straight monthly surpluses.
Statistics Canada reported Tuesday that imports only increased by a little bit — 0.6 per cent to be precise. But the balance flipped to a sizable deficit because exports plunged. Exports were lower in 8 out of 11 subsectors tracked by the statistics agency.
All in all, exports were down by 2.4 per cent from January’s record high level, to $45.3 billion. Exports of just about everything decreased, including farm, fishing and intermediate food products, aircraft and other transportation equipment and parts, as well as consumer goods.
“After a huge January for the Canadian economy, it looks as though we could be in for some payback in the February data,” Bank of Montreal economist Benjamin Reitzes said.
One of the biggest drop-offs was canola, exports of which declined by 33.7 per cent to $552 million in the month. “This followed three consecutive monthly increases during which exports of canola more than doubled, reflecting higher Chinese demand for Canadian canola,” Statistics Canada said.
While down from January’s record level, Canada’s overall exports are still up by 4.4 per cent compared to the same month a year ago.
“February’s weakness notwithstanding, the outlook for export growth in Canada remains solid,” TD economist James Marple said. “One of the brightest spots in the U.S. outlook over recent months has been manufacturing activity, which exhibits a sturdy and leading relationship with Canadian exports.”