U.S. and Canadian March Trade Highlights

May 11, 2011

A USD 48.2 billion goods and services trade deficit in March was 6.0% wider than the February deficit, and the first-quarter U.S. shortfall was USD 26.7 trillion or 23.5% greater than the deficit in the first quarter of 2010.  In first quarter-over-first quarter comparisons, U.S. exports climbed 14.9%, while imports went up 16.7%.  Net exports exerted a drag on GDP growth for the fourth time in five quarter, albeit by just 0.1 percentage point.  The point of the recession and the dollar’s depreciation was to turn foreign trade into a growth enhancer, and that hasn’t really happened.  Likewise, Chinese data released earlier today revealed that a shift in that economy toward consumption-led growth and away from investment- and export-led expansion is dragging, too. 

A geographic profile of the U.S. merchandise trade deficit last quarter shows that 38.0% of such was with China, followed by 19.0% with OPEC, 16.9% with other countries in the Western Hemisphere, 15.2% with Europe and 10.3% with Japan.  Those areas respectively accounted for 30.8%, 27.0%, 11.8%, 18.9%, and 12.0% of the incremental growth in the U.S. deficit between the first quarter of 2010 and the first quarter of 2011.

Canada posted a CAD 627 million trade surplus in March after surpluses of CAD 356 million in February and CAD 1.387 billion in January.  The CAD 2.371 billion first-quarter surplus was significantly bigger than a CAD 148 million surplus in the last quarter of 2010.  Deficits of CAD 47 million, CAD 9.108 billion and CAD 4.568 billion were posted in 1Q10, calendar 2010 and calendar 2009.  The CAD 2.2 billion improvement of the trade balance last quarter points to a shrinkage of the current account deficit from 2.7% of GDP in 4Q10 to some 2.2% of GDP if all non-goods trade components in the current account stayed the same.  Canadian exports in the first quarter were 5.4% larger than in 4Q10 and 13.4% greater than a year earlier.  Imports recorded quarterly growth of 3.3% and on-year expansion of 10.9%.  Virtually all of the rise in the trade surplus between February and March occurred in energy, whose surplus widened to CAD 5.389 billion from CAD 5.085 billion in February.  There was strong monthly growth during March in exports of industrial goods and materials (up 3.7%) and machinery and equipment (+4.8%).  Exports as a whole grew 3.5% in March but were almost matched by a 2.8% rise of imports.

Copyright Larry Greenberg 2011.  All rights reserved.  No secondary distribution without express permission.

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