Canada's foreign trade makes strides towards post-Covid recovery
CANADA's trade with the world continued its recovery to more normal levels as exports and imports increased 35 per cent since falling to a decade-low in April, reports Bloomberg
CANADA's trade with the world continued its recovery to more normal levels as exports and imports increased 35 per cent since falling to a decade-low in April, reports Bloomberg.
Statistics Canada reported that merchandise exports rose 11.1 per cent in July, adding to a 20.5 per cent gain in June while imports increased 12.7 per cent in July, after gaining 20.3 per cent in June.
'July's trade data joins other indicators in confirming that Canada's recovery has remained intact,' said Toronto-Dominion Bank economist Omar Abdelrahman.
'However, notable headwinds mean that the road forward for both is mired with uncertainty. For one, growth in services trade is expected to remain restrained,' he said.
Service exports are still down 23 per cent from pre-Covid levels, compared with six per cent for merchandise exports. On the imports side, services are still 33 per cent lower than February levels versus 4.1 per cent for goods.
The quicker rebound in imports caused the country's merchandise trade deficit to widen to C$2.45 billion (US$1.87 billion) in July, from a revised C$1.59 billion in June. Economists had expected a deficit of C$2.5 billion.
Motor vehicle exports have already surpassed pre-pandemic levels, as have shipments of consumer goods, which could foreshadow an upcoming dip.
Warned Scotiabank economist Nikita Perevalov: 'There is a risk of a significant slowdown in exports in August-September, given that the volume of auto exports is now 10 per cent above the pre-pandemic February level.'