THE BANK OF NOVA SCOTIA By Kim Mackrael
OTTAWA--Canada unexpectedly posted its first trade surplus in merchandise goods in more than a year in January amid a sharp increase in aircraft sales and widespread gains in other export categories.
Statistics Canada said Friday that Canada's surplus in the global trade of merchandise goods in January came in at 1.41 billion Canadian dollars, or the equivalent of $1.12 billion. Market expectations were for a C$1.4 billion deficit, according to economists at Bank of Nova Scotia.
The previous month's trade deficit was revised to C$1.98 billion versus the earlier estimate of C$1.67 billion.
January's trade data marked Canada's first merchandise trade surplus since May 2018 and the largest surplus in more than six years. Imports rose 0.9% on a nominal basis in January, while exports surged 8.1%, or the most since the rebound recorded last summer after Covid-19 restrictions were first eased.
In volume, or price-adjusted, terms, imports advanced 1% and exports increased 5.1%.
The gains in January exports were widespread, Statistics Canada said, but led by a sharp and atypical surge in exports of aircraft and other transportation equipment and parts, which rose 72.3% in the month as some used aircraft were sold to the U.S. Consumer goods exports advanced 11.6%, in part because of higher exports of gold bars to the U.S., and energy product exports rose 5.9%.
Economists said exports in January looked strong, even without the unusual surge in aircraft sales. Every major category of merchandise exports recorded an increase in the month.
"The surprise trade surplus is a welcome development in what was expected to be a very challenging time for the economy," said BMO Capital Markets strategist Benjamin Reitzes.
Although he added there will likely be a pullback in February's trade data, because the aircraft sales were a one-time event, the January report is "another sign that the economy weathered the second wave impressively well."
Write to Kim Mackrael at kim.mackrael@wsj.com
(END) Dow Jones Newswires
03-05-21 0940ET
