Hints in Hot-Growth Exports

Last week's merchandise trade figures were pretty impressive, all things considered. Weather has wracked a lot of January and February indicators, but so far, you can count out Canadian trade. Were we just lucky, did we capitalize on others’ weather misfortunes, or is something else going on?

Likely all three factors played a role. Take weather, for instance. Low temperatures and heavy snow across much of the lower-48 prompted a surge in energy exports. Natural gas exports were up 87 per cent in February over last year's levels. On the same basis, electricity was up 82 per cent, and in spite of much-publicized transportation constraints, crude oil shipments were up 16 per cent, thanks to a three-month rebound. The numbers are impressive, but they will likely be just about as fickle as the weather, settling back into a normal rhythm as the year wears on.

Lousy weather could also be seen as an explanation for a notable gain in a lesser-known export category. Last year, Canada exported over $1.3 billion of heating, cooling and air purification equipment. As of February, exports were up 26 per cent year-on-year. But unlike energy exports, this increase isn’t tied to temperatures; the rise has been sustained since early 2013. It’s more likely connected to the US housing boom and more recent gains in non-residential investment stateside.

This has been excerpted from a 10 April 2014 commentary by Peter G. Hall of Export Development Canada and is available in its entirety at:
http://www.edc.ca/EN/Knowledge-Centre/Subscriptions/Weekly-Commentary/Pages/hints-exports.aspx