Canada posted a merchandise trade surplus in January compared to a deficit in December, as imports fell early in the year.
Statistics Canada said on Tuesday that the country recorded a merchandise trade surplus of $2.6 billion in January, compared with a revised deficit of $1.6 billion in December.
BMO economist Shelly Kaushik said exports were supported by higher energy prices, which partially offset weak auto production due to continued supply chain disruptions.
“General inflation continues to play a role as export and import volumes were weaker than headlines,” Kaushik wrote in a report.
“Looking ahead, we expect scorching energy prices to continue to support exports, with minimal direct impact expected from sanctions on Russia.”
In real or volume terms, total imports fell 8.5% in January, while exports fell 4.6% in volume.
The return to surplus after deficit at the end of 2021 came as total imports fell 7.4% to $54 billion.
Imports of motor vehicles and auto parts fell 13.9% in January, while imports of passenger cars and light trucks fell 12.4%. Imports of engines and parts fell 15.4%.
Meanwhile, total exports edged down 0.2% to $56.6 billion, as exports of motor vehicles and parts fell 9.6%. Excluding energy products, exports fell 2.7%.
Regionally, Statistics Canada said the return to a trade surplus came as the country posted its largest surplus with the United States since July 2008. Canada’s trade surplus with its largest trading partner was to $9.3 billion in January, from $7.1 billion in January. December.
Meanwhile, Canada’s trade deficit with countries other than the United States narrowed to $6.7 billion in January from $8.6 billion in December.
On the services side of the equation, Canada’s monthly international trade in services deficit increased to $314 million in January from $172 million in December.
Services exports fell 4.0% to $11.6 billion, while imports fell 2.8% to $11.9 billion.
Canada’s combined trade in goods and services generated a surplus of $2.3 billion in January, compared to a deficit of $1.8 billion in December.
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