Canada Trade Surplus Widens

Canada's trade surplus widened to the largest in 10 months in March, as energy exports jumped and imports of automotive products fell., Bloomberg 5/9/2008 6:13:19 AM

The surplus grew to C$5.53 billion ($5.47 billion) from a revised C$4.79 billion in February, Statistics Canada said today in Ottawa. Exports rose for a third month, gaining 1.6 percent. Imports fell 0.3 percent.

Canada, the world's eighth-biggest economy, is benefiting from record prices for commodities such as oil and metals, helping the country ride out a slump in manufacturing amid weak demand from the slowing U.S. economy. Energy exports advanced 6.6 percent in March.

Still, the central bank has indicated that trade will be a drag on the Canadian economy this year as the U.S. slowdown and Canada's high currency crimp factory goods. The bank lowered its key interest rate half a percentage point on April 22 for the second straight meeting, to 3 percent, the lowest since 2005, and has said it will probably cut borrowing costs further.

Industries tied closely to slumping U.S. demand for automobiles and lumber and the high Canadian currency are suffering the most. Automotive products posted a 4.9 percent drop in exports during the month, while the forestry sector recorded a 7.7 percent decline.

Imports dropped for a second month, led by automotive products. In volume terms, both imports and exports fell.

Canada Trade Surplus Widens