Canada’s trade surplus widens even amid auto-sector slump

Canada’s trade surplus with the rest of the world unexpectedly widened in September as the nation benefited from higher oil prices.

The country’s merchandise trade surplus increased to C$1.86 billion ($1.5 billion) from a revised C$1.51 billion in August, Statistics Canada reported Tuesday in Ottawa. That exceeds the C$1.6 billion consensus estimate for September in a Bloomberg survey of economists. 

The fourth-straight monthly surplus marks the longest positive trend since 2014. But it comes as growing supply chain bottlenecks reduce overall international trade, largely reflecting production issues in the automotive sector. 

That’s a source of concern for the long-term sustainability of Canada’s trade performance. Total exports fell 2.3% in September, while imports dropped 3% due to the declining trade of cars amid a shortage of semiconductor chips. 

“In sum, a wider surplus, but once again largely not for the reasons we want to see,” Andrew Grantham, an economist at Canadian Imperial Bank of Commerce, said in a report to investors.

Exports of motor vehicles and parts fell 18%, while imports from the sector dropped 14%. Excluding the industry, exports were down 0.5%. Crude oil exports, meanwhile, were up 7.2% in September.