© Reuters. FILE PHOTO: Shipping containers are seen behind fences in the Port of Montreal in Montreal, Quebec, Canada, May 17, 2021. REUTERS/Christinne Muschi
By Julie Gordon and Ismail Shakil
OTTAWA (Reuters) – Canada’s exports surged in May, mainly driven by high energy prices, which helped push the country’s surplus with the rest of the world to a surprise 14-year high, key data The formula showed on Thursday.
Statistics Canada said exports rose 4.1 per cent, led by energy but also boosted by aircraft and potash, while imports fell 0.7 per cent, mainly due to lower volumes of consumer goods. .
All told, Canada’s trade surplus rose to C$5.3 billion ($4.1 billion) in May, much higher than analysts’ forecasts of C$2.4 billion. and up from the adjusted C$2.2 billion in April.
“This seems to be an energy story, particularly thanks to higher prices,” said Stuart Bergman, chief economist at Export Development Canada.
In fact, Canada’s energy exports rose 5.7% in May to C$20.4 billion, almost a third of the value of Canada’s total exports. This is due to rising global crude oil prices due to Russia’s invasion of Ukraine and booming consumer demand.
Total value of Canada’s exports so far is up more than 20% this year, despite a 2.3% drop in volume, Statistics Canada said.
“The export motive is very clear that is bringing the Canadian economy here,” Bergman said. “But again, the concern is that we’re relying on commodity prices.”
That sharp rise in commodity prices is allowing Canada to weather an economic storm that threatens to push many rich G7 nations into recession, but the picture could change later this year when prices fall again.
“It is likely that the surplus will improve again in June, but with commodity prices falling across the board, the trade surplus is likely to shrink again in the second half of the year,” said Stephen Brown, Canadian economist. senior at Capital Economics, said in a note.
Canadian imports fell for the first time in four months in May as retailers brought in less clothing, shoes and accessories and pharmaceutical products.
“It could be more of a supply than a demand issue, which could be bad news from an inflationary standpoint,” said Andrew Grantham, senior economist at CIBC Capital Markets.
The Canadian dollar traded 0.3% higher at 1.30 against the greenback, or 76.92 US cents.
(1 dollar = 1.2996 Canadian dollars)
