Canadian trade balance data for August 2021:
- Prior was +$0.78B
- Exports $B vs $53.75 prior
- Imports $B vs $52.97B prior
- $8.6B monthly surplus with the US was largest in 13 years
Falling lumber prices took some of the wind out exports after a record high in July but oil and gas will soon offer a new tailwind. We got an early taste of that this month as the value of energy exports rose 5.1% to $12.0B. That's near the 2014 record high of $12.8B and given the state of oil and gas prices, there's a good chance that's broken this month.
All of that is a hearty tailwind to the Canadian dollar, though some argue that border reopening and tourism could be a fresh headwind in the months ahead.
Here's the take from CIBC, which is less rosy:
Higher energy prices will continue to provide a tailwind to the trade balance. However, the fall in two-way auto trade reflects ongoing production issues in the sector. While that helped the trade surplus in August, it's not good news. Moreover, the mechanical disruption at an oil sands facility could restrain crude export volumes in upcoming reports. As a result, despite the wider-than-expected surplus, the report doesn't suggest that GDP was any better than the 0.7% seen in Statistics Canada's flash estimate of August nor our Q3 forecast for 4% annualized growth.
