By Julie Gordon
OTTAWA (Reuters) -Canadian trade disappointed in April, as both imports and exports slowed, official data showed Tuesday, but economists said the lull was likely temporary, with supply chain disruptions easing and oil exports set to rebound.
Canada’s exports rose 0.6% in April and imports climbed 1.9%, with the trade surplus narrowing to C$1.5 billion ($1.19 billion) from C$2.28 billion in March, Statistics Canada said.
Analysts surveyed by Reuters had expected the surplus to widen to C$2.9 billion.
“Today’s release was somewhat disappointing, though the details of the report suggest part of the weakness should be temporary,” said Karyne Charbonneau, a senior economist at CIBC Capital Markets, in a note.
She noted oil exports should rebound in May as production resumes following maintenance shutdowns, but warned exports may not boost second quarter economic growth as much as hoped.
The value of Canada’s exports has jumped 12.8% since the start of 2022, but is down 4.9% in real terms, Statscan said, with surging commodity prices offsetting lower volumes.
Exports of motor vehicles and parts in April hit their highest level since October 2020, suggesting some of the supply chain issues that have plagued the sector are easing, but exports remain below pre-pandemic levels.
“I think we can take some comfort from the story that we see around supply chain,” said Stuart Bergman, chief economist at Export Development Canada.
Seafood exports surged, driven by surging crab prices and volumes. Energy exports came off record highs in April, as crude oil production dropped temporarily, partially offset by surging natural gas and coal exports.
On the import side, consumer goods led gains, with imports of silver and energy products also up.
“The import the consumer goods still shows strong pent up demand from Canadian consumers,” said Bergman.
The Canadian dollar was trading 0.2% higher at 1.2550 to the greenback, or 79.68 U.S. cents.
($1 = 1.2600 Canadian dollars)
(Reporting by Julie Gordon in Ottawa, additional reporting by Dale Smith in Ottawa and Fergal Smith in TorontoEditing by Nick Zieminski)
