Global trade is on a slow but steady rebound as government stimulus programs spur demand and production in economies around the world.
The turnaround is somewhat uneven, and in some countries import growth is dramatically outpacing increases in exports, but gains in sales abroad are also expected to pick up as the worldwide recovery solidifies.
"Trade growth has come back substantially from where it was," said Steve Dunaway, adjunct senior fellow for international economics at the Council on Foreign Relations in Washington. "By the middle of last year, everyone was looking at declines in export growth. Export growth has a tendency to lag output growth, so it's not surprising that it's a little bit weaker than some of the indicators for output growth."
Canada tipped back into a trade deficit in November as the improving domestic economy caused imports to rise at more than three times the pace of exports, which are improving but still 19 per cent below year-earlier levels.
In the United States, the trade gap widened more than expected as imports outpaced exports because of higher oil prices and companies worked to replenish inventories. However, U.S. exports increased for the seventh successive month
Exports grew faster than imports in Britain, one of the last big developed nations that hasn't yet seen a return to economic growth. In Jap an, where imports were 18 per cent lower than a year earlier because demand remains static, the country had the smallest year-over-year export drop in 14 months on the strength of car sales elsewhere in Asia. And in China, exports jumped in December for the first time in 14 months.
With the exception of China, where not-yet-started infrastructure projects will mean the effects of government largesse are felt longer than in other nations, Mr. Dunaway said, many key economies are so dependent on stimulus spending that it's too soon to gauge the staying power of their recoveries.
For Canadian companies, there is reason for cautious optimism but trade is likely to remain choppy, said Peter Hall, chief economist of Export Development Canada.
"In the heaving seas between the end of recession and the beginning of a recovery, it's just a volatile zone," Mr. Hall said in an interview.
Even as a survey released yesterday indicates growing confidence among exporters, several hurdles remain, Mr. Hall said. It's unclear how economies will grow once government spending tapers off. Financial markets remain "fragile." Domestic demand in the U.S., Western Europe and Japan is still shaky. And the Canadian dollar remains strong.
Still, companies are adapting, he said, taking more steps to live with a high dollar, such as hedging - using a variety of strategies to reduce exposure to currency swings - re-jigging production lines and taking advantage of cheaper imports of equipment and machinery. The share of Canadian exporters that hedge to protect themselves from volatility in currency markets has risen to 19 per cent from 15 per cent in the spring, according to EDC's semi-annual trade confidence index.
Steven Sutherland, president of Ottawa-based Combat Sports Group, said he's optimistic about the coming year, even though the still-sluggish U.S. market accounts for about 70 per cent of his business, which designs, makes and distributes baseball bats and hockey sticks.
"Bookings are increasing, and we're seeing new customers come on board," said Mr. Sutherland, who expects 40-per-cent sales growth this year. "People may be giving up winter vacations but they're continuing to play these sports. And they still want the newest bat and hockey stick."
Greg Wight, on the other hand, said his company, Algoma Central Corp., the largest operator of dry-bulk vessels on the Great Lakes - St. Lawrence Seaway, has seen little sign of improvement in U.S. demand.
His company moves raw materials for North American firms that make steel, power generation, homes and roads. Some pockets of business are brightening, such as demand for steel. But among fleets that carry items such as gypsum for drywall - in hot demand when U.S. construction is humming - "the industry is flat on its face." Even demand for materials used in road construction, despite all the stimulus spending, is sluggish, he said.
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Global snapshots
U.S.
Trade deficit, November: $36.4-billion (U.S.)
Exports: Up 0.9% from previous month to highest level in more than a year.
Imports: Up 2.6 per cent as oil prices jumped.
Trend: As demand from consumers and businesses recovers, imports will keep rising. The weaker U.S. dollar will help U.S. products overseas.
U.K.
Trade deficit, November: £6.8-billion ($11-billion U.S.).
Exports: Sales to China jumped 21 per cent from a year ago and sales to Hong Kong rose 15 per cent. Average export prices fell 0.4 per cent from earlier month.
Imports: Dropped even as average import prices were down 0.6-per cent from October.
Trend: Weaker pound may eventually boost British exports
further.
Canada
Trade deficit, November: $344-million (Canadian).
Exports: Up 1.1 per cent from month earlier.
Imports: Up 3.9 per cent from October..
Trend: While trade picture has improved in recent months, it's still off pre-recession levels, with exports down 19 per cent from November 2008.
China
Trade surplus, December: $18.4-billion (U.S.).
Exports: Up almost 18 per cent from year earlier, to $130.7-billion.
Imports: Soared 56 per cent to $112.3-billion.
Trend: Import gain provides more evidence that China is at risk of overheating. Export growth may increase calls for China to let its currency appreciate against the greenback.
Japan
Current account surplus, November: 1.1-trillion yen.
Exports: Down 7 per cent from a year earlier, amid stronger demand for cars spurred by exports to Asia. Imports: Down 18.2 per cent from a year earlier, reflecting sluggish domestic demand.
Trend: Export picture, though still down, is improving.
Staff, with files from wires
Tavia Grant