* February trade surplus much smaller than expected
* Exports drop by 3.9 percent, imports edge up
* Analysts say data may be a one-off, cite strong auto sales
* New home prices rise 0.3 percent in February from January
By David Ljunggren
OTTAWA, April 12 Canada reported a much smaller
than expected trade surplus for February on Thursday as auto
exports to the United States fell, puzzling analysts who cited
healthy U.S. vehicle sales so far this year.
Statistics Canada said the surplus dropped to just C$292
million ($292 million) from a revised C$1.95 billion in January.
The figure was much less than the C$1.90 billion forecast by
Exports sank by 3.9 percent as shipments of energy products
dropped by 6.9 percent, while automotive products fell 11.9
percent after five consecutive monthly increases.
"Autos don't really stack up to what's going on in U.S.
sales at the moment so it's a bit of a head scratcher," said
Peter Hall, chief economist at Export Development Canada, a
"I think what we're talking about is sort of a pause, maybe
a pause that refreshes here ... I think the March data are going
to come along and erase a lot of the negatives that we see in
this month," he told Reuters.
U.S. auto sales rose about 13 percent in March, rounding out
the best quarter since 2008. The U.S. and Canadian auto
industries are highly integrated.
Douglas Porter, deputy chief economist at BMO Capital
Markets, said the lower surplus was disappointing and that the
11.9 percent drop in exports of automotive products was "a bit
of a shock".
He said the underlying trend in Canadian trade had still
strengthened since last year, when big deficits were reported.
"The big declines in both autos and crude oil exports are
unlikely to be sustained - arguably, those are the sectors we
would be least concerned about at this stage of the cycle," he
said in a note to clients.
The Canadian dollar shrugged off the news and maintained an
early trading rise against its U.S. counterpart, pushed up in
part by higher oil prices.
At around 9:50 a.m.(1200 GMT), the Canadian dollar
was at C$0.9982 versus the U.S. dollar, or $1.0018, up from
Wednesday's finish of C$1.0042 versus the U.S. dollar, or 99.58
Statscan said exports to the United States, which made up
73.9 percent of all Canadian exports in February, dropped by 3.8
percent. The trade surplus with the United States fell to C$4.81
billion from C$6.06 billion in January.
Imports rose by 0.2 percent on an 18.3 percent surge in the
import of energy products, in particular pipeline diluents and
aviation fuel. Overall volumes fell by 0.9 percent.
The figures are the last economic data before the Bank of
Canada sets interest rates next week.
A Reuters poll released on Wednesday showed that economists
do not expect the central bank to raise its key lending rate for
at least another year.
The bank's spring survey, released on Monday, said Canadian
business had the brightest outlook on sales in two years in the
first quarter of 2012.
The Conference Board of Canada said on Thursday that its
leading indicator of industry profitability had not shown any
signs of growth since last November.
"The lack of significant job creation in recent months, the
strong Canadian dollar, and the sideways movement in the stock
market are preventing an improvement in the outlook for
profitability," it said.
Separately, Statscan said prices of new homes in Canada rose
by 0.3 percent in February from January, the 11th consecutive