Statistics Canada says the merchandise trade surplus in October 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% to a record $56.2 billion.

Exports of motor vehicles and parts rose 30.8% to $6.1 billion as stoppages in the auto sector related to semiconductor chip shortages eased compared with September. Higher prices also helped exports of energy products gain 9.8% to reach a record $13.9 billion.

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

In volume terms, total exports rose 2.8% in October, while total imports rose 7.0%.

Regionally, Canada’s trade surplus with the United States was $8.3 billion in October compared with a surplus of $8.4 billion in September as exports to the country’s largest trading partner rose 6.9% and imports gained 9.1%.

Canada’s trade deficit with countries other than the United States was $6.2 billion in October compared with $7.0 billion in September.

In a separate report, Statistics Canada said the country’s monthly international trade in services deficit was $562 million in October compared with $758 million in September.

The agency said exports of services increased 2.2% to $11.4 billion, while imports rose 0.4% to $12.0 billion.

Combined, Canada had a trade surplus of $1.5 billion for goods and services for October compared with a surplus of $657 million in September.