Momentum in Canada's export sector continued in January, an indication that an export-driven recovery is already underway for the Canadian economy.
The volume of exports expanded 8.8 per cent in the past year, and in dollar terms, Canada exported $46 billion of merchandise, a 7.3 per cent increase since last year, according to figures from Statistics Canada.
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While the value of energy exports is in steep decline, exports of consumer goods and motor vehicles and parts are up.
In the past month, there also was a surge in precious metals exports, reflecting the accelerating price of gold as investors seek out a safe haven amid volatile markets.
While exports grew one per cent since December, imports increased 1.1 per cent to $46.7 billion, widening the merchandise trade deficit to $655 million in January.
Imports fell this year
In the past year, imports have actually dropped 4.4 per cent in dollar terms, as the weak Canadian dollar discourages buying from foreign sources. Unfortunately, that figure also includes a plunge in business capital spending, as companies face higher prices for new imported equipment and the oilpatch pulls back.
The export surge is a positive sign for the Canadian economy, after GDP numbers for 2015 came in at a better-than-expected 1.2 per cent, said BMO economist Doug Porter.
"The solid gain in export volumes at the start of 2016 is yet another indication that the long-awaited transition to the non-resource sector is finally taking hold big time," he said in a note to clients.
"This is quite simply good news for the growth outlook, and puts a much healthier glow on GDP both for Q1 and for the year as a whole."
The low dollar and the strength of the American economy helped exports to the U.S. surge 2.6 per cent in January.
Export winners and losers
"U.S. economic data continues to underscore the strength of American consumers," said TD Bank economist Dina Ignjatovic. "This certainly bodes well for Canadian exports going forward, given that 75 per cent of Canadian-made goods head south of the border."
Among the losing sectors in the past year in exports in dollar terms, according to Statistics Canada:
- Energy products, down 28.5 per cent.
- Aircraft and transportation equipment, down 25 per cent.
- Metal and non-metallic mineral products, down 8 per cent.
Among the best-performing exports in the year to January in dollar terms:
- Motor vehicles and parts, up 39 per cent.
- Forestry products and building materials, up 13.8 per cent.
- Consumer goods, up 40.8 per cent.