Canada's trade surplus declined substantially in February as exports to the United States and the rest of the world declined sharply while imports edged up, the latest figures from Statistics Canada show.
The federal agency said Thursday that the trade surplus dropped to $292-million from $1.9-billion in January as overall exports fell 3.9 per cent to $39.6-billion.
Energy and automotive products were the main contributors to the decline.
Imports increased 0.2 per cent to $39.3-billion as prices rose 1.0-per cent.
The trade surplus with the United States, Canada's biggest trading partner, fell to $4.8-billion from $6.1-billion as exports fell 3.8 per cent to $29.3-billion.
Exports to countries other than the United States fell four per cent to $10.3-billion as the country's trade deficit with the rest of the world rose to $4.5-billion from $4.1-billion in January.
“In real terms, the picture was not much better, with export volumes down 3.5 per cent and import volumes down 0.8 per cent,” said TD Economics economist Dina Cover.
“After trending up steadily during the second half of last year, it appears as though Canadian exports are losing some steam,” Ms. Cover wrote in a note.
However, big gains in exports in the final two months of 2011 had provided a strong hand-off for the first quarter “so even with the drop seen in January and February, net exports are still expected to be a significant contributor to growth in Q1,” she said.
Ms. Cover said that going forward, exporters will continue to be faced with a challenging environment, “notably an elevated Canadian dollar and weak economic growth in Europe.”
“That said, despite some weaker than expected data out of the U.S. recently, the economic recovery stateside is expected to remain on track, suggesting that demand for Canadian-made products from our largest trading partner will improve,” Ms. Cover added.