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A cargo ship loaded with cargo containers bound for the Vancouver port makes its way under the Lions Gate bridge April 29, 2009.JOHN LEHMANN

Canada's export sector is losing some momentum, though still recovering from the collapse in global trade at the height of the crisis.

Exports rose just 0.5 per cent in January, a slower pace than in the four preceding months, Statistics Canada said Thursday. That was due to a slowdown in exports of autos and machinery.

Exports to the United States fell 0.6 per cent while those to other countries rose 3.8 per cent, suggesting Canada's ties to the United States remain a drag on the economy.

Total exports in January rose to $33-billion from $32.9-billion as prices increase 0.8 per cent, while volumes actually fell 0.3 per cent. Imports to Canada, in turn, slipped to $32.2-billion from $32.8-billion on lower volumes and prices.


That left Canada with a trade surplus of $799-million in January, a 10-month high, from December's $75-million, Statistics Canada said.

Outside of the United States, exports to OECD countries and Japan were the main factors behind the gain, the agency said.

The report was surprising in that the surplus was strong but export growth was tepid, said TD Securities chief economics and rates strategist Eric Lascelles.

"Ultimately, we continue to believe that exports and imports in Canada can enjoy concerted growth, if only to carry them along their journey back to levels closer to the pre-crunch norm," Mr. Lascelles said. "Trade will not tend to contribute forcefully to overall economic growth, but it nonetheless represents a hugely important aspect of the Canadian economy."

The Bank of Canada noted earlier this month that the economy has been hotter than it expected. At the same time, Canadian dollar strength and weak U.S. demand are still acting as "significant drags" on the Canadian economy.

Factories are boosting capacity to meet a pickup in demand, though they're hardly running at full steam. Canadian industries operated at 70.9 per cent of capacity in the fourth quarter -- the first sizable increase since the first quarter of 2007, Statistics Canada said in a separate report Thursday. Capacity utilization plunged to its lowest level on record in the second quarter of last year as demand dried up.

Canada's "modest" growth in January's exports was driven by higher shipments of metals, such as gold, chemicals, plastics and fertilizers. Exports of consumer goods, such as apparel, footwear, toys and pharmaceuticals, also rose.

Auto products exports fell 4.1 per cent as some auto makers extended plant shutdowns into January. Machinery and equipment exports fell 1.5 per cent on lower aircraft shipments.