Canada posts first trade surplus in two years

Canada posted its first trade surplus in almost two years in August, the government statistical agency said Friday, beating economists' expectations.

The Can$526 million (US$407 million) surplus followed a Can$189 million deficit in July -- as falling imports outpaced a drop in exports.

Combined with positive employment figures released earlier, CIBC Economics analyst Royce Mendes predicted a boost in the Canadian dollar, but added the data "likely overstate the positives for the economy."

Exports in August, according to Statistics Canada, fell 1.1 percent to Can$50.5 billion, mostly on lower sales of passenger cars and trucks to the United States that coincided with "atypical shutdowns" in the industry.

The agency also noted lower exports of unwrought gold and crude oil to Britain, while exports of copper ores and concentrates were up mostly due to shipments to Japan, South Korea and India -- which also bought more potash from Canada. Imports, meanwhile, declined 2.5 percent to Can$50.0 billion in August.

Aircrafts and other transportation equipment and parts imports fell for a third consecutive month from a record high in May.

There were no imports of commercial airliners in the month, Statistics Canada said, but the year-to-date value of imports of aircraft engines and parts remains at a record high.

Imports of motor vehicles engines and parts, and consumer goods -- notably pharmaceutical and medicinal products, miscellaneous goods and supplies and furniture and fixtures -- fell in August.

Canada imported less overall from China, as well as less bauxite from Brazil, fewer pharmaceutical and medicinal products from Belgium, less crude oil from Algeria and less gasoline from the Netherlands.

These declines were partially offset by higher imports of copper from Switzerland. Canadian trade with the United States decreased in the month, but its trade surplus with its neighbor remained "essentially unchanged" from July and August at Can$5.3 billion -- the largest in a decade.

Exports of steel to the United States rose a second month in a row after the US slapped 25 percent tariffs on steel, but aluminum exports subject to a 10 percent US tariff fell for a third consecutive month.