Nathan Janzen, senior economist at the Royal Bank of Canada, points out that Canada’s trade balance narrowed to $1.0 billion in April as nominal exports increased 1.3% and imports fell 1.4%.
Key Quotes
“The improvement in the April trade balance was larger than expected, but the details were not as strong. Export volumes jumped 1.1%, but a big chunk of that came from the a 15% surge in exports of metal and non-metallic mineral products That reflected higher gold exports, an often-volatile component, that is not likely to be repeated going forward.”
“A big 2.1% drop in import volumes helped make the net trade balance look better in April – and we continue to expect net trade will retrace about half of the large 4 percentage point drag on overall Q1 GDP growth in Q2. But lower imports of electrical equipment and the continued retracement of a huge surge in aircraft imports in January also suggests that business investment spending in Q2 will retrace a big chunk of the 40% Q1 gain.”
“Broader trends for exports still look relatively uninspiring, non-energy exports are still up only modestly from a year ago by our count. That is not new, but the US-led escalation in global trade tensions over the last couple of months also leaves some downside risk.”
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