* Canada exports up 5.1 percent, imports up 1.7 percent
* Surplus is the first since March 2012
* Trade surplus with United States grows to C$3.82 billion
By David Ljunggren
OTTAWA, May 2 In a sign the spluttering Canadian
economy might grow faster than expected in the first quarter,
surging exports helped produce the country's first trade surplus
in a year in March.
Statistics Canada said on Thursday that a 5.1 percent jump
in exports was behind an unexpected trade surplus of C$24
million ($24 million). Traders had predicted a shortfall of
C$720 million after the revised C$1.25 billion deficit in
Canada last recorded a trade surplus - a modest C$45 million
- in March 2012.
Canada's export sector - a major driver of the economy - has
long struggled with a strong Canadian dollar and weak
international markets. It is also heavily reliant on the United
States, which has been showing signs of recovery.
Other recent figures, including strong February growth
figures on Tuesday, also suggest the domestic economy is
starting to pick up speed.
Last month, the Bank of Canada predicted first quarter
growth of just 1.5 percent on an annualized basis.
"It now looks like trade will add significantly to real GDP
growth in the first quarter," said Robert Kavcic of BMO Capital
Markets in a note to clients.
"We upgraded our Q1 Canadian growth forecast to 2.3 percent
(from 1.5 percent) after Tuesday's real GDP report, and these
trade results fully support that change."
The Canadian dollar firmed to a session high of C$1.0060 to
the U.S. dollar, or 99.40 U.S. cents. It closed at C$1.0081, or
99.20 U.S. cents on Wednesday.
In March, exports jumped by 5.1 percent, the biggest leap
since the 5.3 percent recorded in March 2011. Exports of energy
grew by 3.9 percent while shipments of motor vehicles and parts
increased by 6.1 percent.
Peter Hall, chief economist at Export Development Canada,
said the export figures reflected a U.S. economy which is still
recovering from last year's Superstorm Sandy, which hit the
eastern seaboard in late October, and fears over the impact of
wrangling over the budget.
"I am thrilled about the fact we have a 5.1 percent month
and that it's very broadly based a lot of industries. That shows
to me that this is not a flash in the pan," he told Reuters.
Hall echoed Bank of Canada Governor Mark Carney, who said
this week that private industry rather than government spending
was fueling U.S. growth.
"This is a report that illustrates what we've been trying to
say for an awfully long period of time, and that is that
fundamental underlying growth in the United States is very
strong," Hall said.
Exports to the United States, which took 72.8 percent of all
Canadian exports in March, grew by 4.0 percent while imports
were up by 2.0 percent. As a result, the trade surplus with the
United States grew to C$3.82 billion from C$3.18 billion in
Imports increased by 1.7 percent, thanks largely to an 18.1
percent leap in imports of crude oil and bitumen after three
consecutive monthly declines.