Feb. 10 (Bloomberg) -- Canada’s merchandise trade surplus widened in December to the largest in more than three years on aircraft exports and record shipments of food and crude oil.
The surplus more than doubled to C$2.69 billion ($2.29 billion) from a revised C$1.17 billion in November, Statistics Canada said today in Ottawa. The December figure exceeded all 19 forecasts in a Bloomberg News survey of economists and was the widest since October 2008.
The report “was universally strong,” said Mazen Issa, Canada macro strategist at TD Securities Inc. in Toronto. “It’s too early to confirm that we are really at a turning point because there are still a lot of uncertainties.”
Greek politicians today protested German demands for deeper budget cuts to avoid a debt default, and there are still questions about the durability of a recovery in the U.S., Canada’s biggest export customer, Issa said. Shipments abroad will see “relatively modest growth” through 2013 because of weak global demand, a loss of Canadian competitiveness and a strong currency, the central bank said last month.
The Canadian dollar trimmed losses after the report. The currency depreciated 0.6 percent to C$1.0011 per U.S. dollar at 9:47 a.m. Toronto time on concern that plans to help Greece avoid default were unraveling. Earlier it weakened 0.9 percent, the biggest intraday drop since Jan. 5. One Canadian dollar buys 99.93 U.S. cents.
Exports rose 4.5 percent to C$42 billion, with energy rising 1.7 percent to C$10.3 billion, including a record C$6.91 billion of crude oil. Agriculture and fishing exports rose 3.8 percent to C$3.84 billion, an all-time high.
Canada returned to a yearly trade surplus of C$1.4 billion in 2011 after two annual deficits tied to the global recession. Annual surpluses exceeded C$40 billion in 2007 and 2008.
The volume of exports rose 4.9 percent in December, and import volumes increased 1.2 percent, Statistics Canada said. The volume figures adjust for price changes and can be a better indicator of how trade contributes to economic growth.
Exports of machinery and equipment rose 9.2 percent to C$7.49 billion, led by a 25 percent jump in aircraft. Automotive products climbed 6.7 percent to C$5.76 billion, the highest since November 2007, and a gain of 27.4 percent from a year earlier.
Imports rose 0.8 percent to C$39.3 billion, the second highest monthly total on record. The main contributor was a 2.6 percent increase in industrial goods to C$8.57 billion.
Trade With U.S.
The surplus with the U.S. widened to C$5.54 billion in December from C$4.69 billion a month earlier, the largest since October 2008. Exports make up about one-third of Canada’s economy, with about 75 percent of the shipments going to the U.S.
There are other signs that demand is picking up in the U.S. A report today showed the December trade deficit widened to a six-month high as a strengthening economy prompted bigger gains in imports than exports. The gap widened 3.7 percent to $48.8 billion as imports advanced 1.3 percent to $227.6 billion, the most since July 2008, Commerce Department figures showed in Washington.
“There is no denying the U.S. is doing well these days and Canada is benefitting,” said Jimmy Jean, a strategist in the fixed-income group at Desjardins Capital Markets in Montreal. “How long that will last is still in question.”
To contact the reporter on this story: Greg Quinn in Ottawa at firstname.lastname@example.org