* Canada exports rise 3.6 pct to highest since 2008
* Imports increase 2.1 pct to record high
* Trade surplus totals C$290 million in February
* Analysts see only small boost to growth from trade
(Adds analysts' comments, market reaction, graphic)
OTTAWA, April 3 Canada reported a small trade
surplus, its first in five months, in February as exports
bounced to their highest since before the 2008 recession,
welcome news for the central bank but likely not enough for it
to declare a full-blown export recovery.
Statistics Canada reported a surplus of C$290 million ($264
million) for February on Thursday, against forecasts for a C$200
million surplus. In January the trade deficit was C$337 million.
The report was the latest piece of upbeat data on the
Canadian economy following a weak start to the year, but
analysts still see net exports making a very small contribution
to economic growth in the first quarter.
"Despite the decent rebound in exports and only small
increase in imports, it looks as though trade will struggle to
add to growth in the first quarter," Benjamin Reitzes, senior
economist at BMO Capital Markets, said in a note to clients.
Imports jumped 2.1 percent in the month to a record high of
C$42.06 billion on increases in shipments of energy products,
autos, and machinery and equipment.
But they were overshadowed by a 3.6 percent surge in exports
to C$42.35 billion on shipments of motor vehicles and parts, and
crude oil and bitumen.
The last time exports were above that level was in August
2008, following a historical peak in July of that year.
Overall exports in February increased 2.2 percent in volume
and prices rose 1.4 percent.
Exports to the United States, by far Canada's biggest
market, shot up 4.4 percent in February and were also at the
highest level since July 2008.
The gains may reflect the end of weather-related
interruptions and weakness in the Canadian dollar rather than a
"There is a lot of uncertainty here by way of the mixture of
one-offs (weather disruptions on production, strikes etc) versus
what is going on in the underlying trade picture," said Derek
Holt and Dov Zigler, economists at Scotiabank Economics, in a
note to clients.
"So the Bank of Canada will remain very cautious on the
trade sector of the economy when it releases the April Monetary
Policy Report," they said, referring to the bank's quarterly
forecasts scheduled for April 16.
Bank of Canada Governor Stephen Poloz has called the
country's export performance "disappointing" as it has lagged a
recovery in other parts of the economy. He has noted that
exports have not reacted to increased U.S. demand the same way
they have after previous recessions.
On March 18, Poloz said he'd seen no evidence yet that a
recent depreciation of the Canadian dollar was having any effect
on the trade sector. He said that in any case U.S. economic
growth would have a bigger influence on trade than the exchange
The Canadian dollar, which has fallen 7 percent
against the U.S. dollar since Poloz adopted a more dovish stance
on monetary policy last October, strengthened modestly on
Thursday after the trade data.
The Canadian dollar was at C$1.1022 to the greenback, or
90.73 U.S. cents, firmer than Wednesday's close of C$1.1035, or
90.62 U.S. cents.
February's 9.7 percent increase in vehicles and parts
shipments, which accounted for much of the export growth, only
partially made up for the 11.3 percent drop in January due to
extended plant shutdowns in Canada and the United States,
Exports of energy products jumped 4.3 percent, led by crude
oil and crude bitumen.
(Reporting by Louise Egan and Alex Paterson; Editing by
Bernadette Baum; and Peter Galloway)