Canada’s trade surplus with the rest of the world unexpectedly widened in September as the nation benefited from higher oil prices.
The country’s merchandise trade surplus increased to $1.86 billion (US$1.5 billion) from a revised $1.51 billion in August, Statistics Canada reported Tuesday in Ottawa. That exceeds the $1.6 billion consensus estimate for September in a Bloomberg survey of economists.
The fourth-straight monthly surplus marks the longest positive trend since 2014. But it comes as growing supply chain bottlenecks reduce overall international trade, largely reflecting production issues in the automotive sector.
That’s a source of concern for the long-term sustainability of Canada’s trade performance. Total exports fell 2.3 percent in September, while imports dropped 3 percent due to the declining trade of cars amid a shortage of semiconductor chips.
“In sum, a wider surplus, but once again largely not for the reasons we want to see,” Andrew Grantham, an economist at Canadian Imperial Bank of Commerce, said in a report to investors.
Exports of motor vehicles and parts fell 18 percent, while imports from the sector dropped 14 percent. Excluding the industry, exports were down 0.5 percent. Crude oil exports, meanwhile, were up 7.2 percent in September.
Canadian auto sales for October are down over 17 percent from last year as a result of lack of supply.
DesRosiers Automotive Consultants says Canadian auto sales were down 17.7 percent in October from a year earlier as vehicle shortages caused by semiconductor supply issues continue to weigh on the industry.
The consultancy estimates light vehicle sales totalled 128,419 for the month for the lowest October sales since 2011.
The drop in October was second this year only to September’s 19.6 percent fall from a year earlier.
DesRosiers says the seasonally adjusted annual rate of sales came in at a “limp” of 1.57 million.
King, a managing partner at DesRosiers, says that while there were some tentative signs of improved availability for one or two key models, the overall picture for the month was of a market held back by continued supply chain problems.
The auto sector has been hit especially hard by the chip shortage, which is due to pandemic-related production issues and a surge in demand for electronics.
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