Canada: Latest Exports Data Shows Improvement

As a resource-rich country, the Canada is heavily dependent exports.Canada exports majority of its natural resources and finished products to USA, its major trading partner.In order to analyze the latest export figures, I reviewed the “Export Instant Insight” report published by Export Development Canada (EDC).

The following are some of the key points in the April,2009 report:

  • Canada’s merchandise trade balance stood at 5.2% in February of this year after falling for 6 consecutive months
  • Machinery and light equipment category was the top performing sector
  • The auto sector came in second with a growth of 20%  after production resumed in many plants
  • Too early to conclude that Canadian exports have seen the bottom in this recession
  • The Forestry products sector showed a growth of just 4.4% over the previous month indicating that the US housing market is still in doldrums
  • Despite this growth, exports volume is still 20% lower than last year levels

Chart #1: Exports (click to expand)


Chart #2: Export Growth Major Sector Comparison (click to expand)


Source: EDC

A simple and easy way to invest in Canada is via an ETF such as the ishares MSCI Canada Index Fund (EWC). As of the end of April the fund is up 9.66%.With $1.2B assets, the ETF offers an yield of 1.84%.Not surprisingly energy and materials comprise the most in the portfolio. Financials are next with about 30%.

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