Merchandise trade surplus grew to $2.1B

Canada’s merchandise trade surplus increased to $2.1 billion in October as exports of motor vehicles and parts and energy products rose higher, Statistics Canada said Tuesday.

The result compared with a revised trade surplus of $1.4 billion for September compared with the initial reading of a $1.9-billion surplus.

TD Bank economist Omar Abdelrahman called it “a solid report.”

“Fundamentals for trade remain on a solid footing, aided by a continued global economic recovery, and importantly, strength in manufacturing sentiment south of the border,” Abdelrahman wrote in a report.

However, he cautioned there are downside risks that should not be ignored.

“In particular, the near-term trade outlook is susceptible to risks emanating from the devastating floods in B.C., which are impacting trade flows through the Port of Vancouver. Indeed, exports and imports could see a meaningful decline in the November data release,” Abdelrahman said.

Statistics Canada noted that the flooding and mudslides resulted in major disruptions to the transportation of goods to and from key points of entry on the West Coast. The agency said the disruptions are expected to impact the trade data for November that is to be released on Jan. 6.

For October, total exports grew 6.4 per cent to a record $56.2 billion. Exports of motor vehicles and parts rose 30.8 per cent to $6.1 billion as stoppages in the auto sector related to chip shortages eased. Higher prices also helped exports of energy products gain 9.8 per cent to reach a record $13.9 billion.

Total imports rose 5.3 per cent to a record $54.1 billion as imports of motor vehicles and parts added 27.2 per cent in October to reach $8.5 billion.