The latest news out of the Canadian economy shows a shrinking trade deficit and positive numbers on energy and consumer product sectors.

“Canada’s export growth was considerably higher in March than was expected, with the trade deficit narrowing for a second consecutive month to $135 million from a revised $1.08 billion in February,” Vishal Kumar Manoria told Toronto Business Daily. Manoria, an assistant manager at global research firm Aranca, has researched various sectors and markets in the Middle East and Europe for leading asset management and private equity firms.

Manoria cited both natural gas and coal exports, and “a substantial pickup in commodity prices” in recent months.

A Toronto Star article recently recorded gains in eight sectors, fueling a rise in exports of 3.8 per cent to a record-setting $47 billion.

Analysts cited growth in metal and non-metallic mineral product imports, imports of industrial machinery and overall exports to the United States as indicators that show an effort to move more supply chain through the country in pursuit of higher export volumes. The article also cited specific commodities and consumer products, such as yellow peas, as exports that saw gains.

Manoria said although the rise may not provide much support to gross domestic product (GDP) numbers from the first quarter of this year, it should “float through” to a bigger rise in the second quarter and beyond.

“We believe that the continuing recovery of U.S. economy, a strong rise in commodity prices and the relatively low value of the Canadian dollar should provide strong support to export growth going forward,” Manoria said, suggesting that the impact of these positive forces should also allow for Canada achieving a target of 6 per cent annual growth in exports, a standard set by the country's export bank. 

However, he said, changes in U.S. trade policy, including North American Free Trade Agreement re-negotiation, may result in lower-than-perceived growth for Canada, since the total trade with the U.S. is roughly 40 per cent of the country’s GDP.