National Bank of Canada’s (NBC) strategist Alexandra Ducharme reports Canada’s merchandise trade surplus hit a four-year high in May as exports reached a record C$77.1 billion. Gains were driven by metal ores and non-metallic minerals, while energy exports declined. Imports fell mainly on weaker gold-related purchases, and real trade flows point to a positive contribution to second-quarter growth.

Record exports lift trade surplus

"Canada’s merchandise trade surplus reached its highest level in four years in May, as exports rose to a record C$77.1 billion."

"In real terms, with two months of data in the quarter, exports are tracking a 27.1% annualized increase, while imports are set to rise 11.5%. This indicates that trade is likely to contribute positively to growth in the second quarter."

"Looking ahead, the recent decline in energy prices following the easing of tensions in the Middle East is likely to weigh on Canada’s nominal exports in the coming months. Given the importance of energy products to the country’s trade balance, this could translate into a narrower surplus."

"That said, traffic through the Strait of Hormuz has yet to return to normal, suggesting that lingering disruptions from the conflict could continue to affect the data as global supply chains remain strained."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)