Canada's exports increased 0.4% driven by a price recovery but dragged by lower volumes, while imports declined by 0.7%. The merchandise trade balance remained in deficit, at $984 million, compared to the $1.5 billion deficit from January (revised from the $2.5 billion initially reported). Year-to-date exports are up 2.6%.

February exports increased in 5 of 11 broad categories but were led higher predominately by energy exports, which grew markedly due wholly to a price recovery from a weak January print. Among the other sectors posting growth, only aerospace showed significant strength, up 8.2%, while consumer goods and machinery and equipment were up at a comparatively moderate pace of change. The main drag to export growth in February came from sharply lower volumes for automotive products, which were likely subdued due to temporary weather effects.

Demand from China, Japan and the United States led exports higher for the month, while exports to Europe surprised on the downside. Lower automotive exports resulted in a weak headline print for Ontario, while BC and Quebec fared comparatively better as they benefit from improved demand fundamentals from south of the border.

The full report is available on the EDC website.