Canadian exports hit a major snag in February due to a 15-day railway strike, causing the trade surplus to shrink by a bigger-than-expected 16 percent from January, Statistics Canada said on Friday.
The temporary disruption in shipments will likely put a dent in first-quarter economic growth but analysts expect a surge of trade activity in March to soften the impact. The trade surplus narrowed to C$4.83 billion ($4.26 billion) from C$5.76 billion in January, disappointing analysts who had forecast, on average, a surplus of C$6.0 billion.
"It looks like trade will subtract a bit from economic growth in the first quarter, after adding nearly 2 percentage points in the fourth quarter," said Sal Guatieri, senior economist at BMO Capital Markets. "It does highlight some downside risk to our estimate," he said, referring to BMO's forecast of 2.5 percent first-quarter growth.
The Bank of Canada will likely look through the February trade data when it sets interest rates on April 24. Markets unanimously expect it to leave rates untouched at 4.25 percent. The Canadian dollar slipped on the trade data to C$1.1361 to the US dollar, or 88.02 US cents, down from C$1.1345 to the US dollar at Thursday's close.
The data from Ottawa coincided with news that the US trade deficit narrowed unexpectedly in February as crude oil imports fell sharply to the smallest level in four years and oil prices were the lowest since December 2005.
Comments
Comments are closed.