Canada’s trade surplus continues to dazzle economists and soothe central bankers. Trade surplus data beat the consensus expectations again, coming in at $6.3 billion for April. The trade surplus has now exceeded $6.0 billion for four straight months, which according to BMO Nesbitt Burns economists is “by far the most impressive performance on record”.

Both exports and imports were up in the month. Exports were led by energy, which gained 16.0%. Auto and lumber exports rose too, and autos also led the import rise. Exports to the U.S. accounted for all the increase, as shipments to the rest of the world fell in the month.

“The string of very solid trade surpluses continues unabated, with strong export and import gains, as does the reliance of the trade sector upon the U.S.,” say BMO Nesbitt Burns economists. “The trade performance should provide support for the Canadian dollar, although there has been little evidence of this recently, and Canadian economic growth is set for continued modest gains.”

Economists at CIBC World Markets are a little less enthusiastic. “Runaway energy exports continue to mask an underlying erosion in Canada1s merchandise trade balance. Excluding the improved energy performance, Canada registered a $860 million contraction in its merchandise surplus, a result more in line with mounting weakness in America1s factory sector.”

Machinery and equipment exports were particularly weak in the month, down 8.2%. “That decline was keyed by sinking shipments of telecommunications equipment, echoing this once high-flying sector1s woeful manufacturing and wholesale performance reported earlier,” says CIBC World Markets. RBC DS notes that this hints at underlying weakness.

CIBC World Markets expects future weakness too, as the energy boom mellows. “Retreating energy prices should see this component1s contribution erode over the balance of Q2. Meanwhile, a deepening factory recession in the U.S. looks to generate further softness in Canada1s non-energy trade position, with hopes of a sturdy second-half recovery in the U.S. fading.”

Notwithstanding anticipated future weakness, economists suspect that this report will help keep the Bank of Canada from easing at its next meeting. “Today1s unexpected improvement in the trade surplus, combined with a consensus-topping retail sales report provided a little boost to the Canadian dollar. With inflation still on the radar screen, these reports will help reinforce market perceptions that the Bank of Canada will maintain its cautious easing approach when it makes its next rate decision on July 17,” says CIBC World Markets.

RBC DS notes, “Within a soft demand environment, today’s trade figures are as good as it gets. Although some deterioration in the surplus is expected over the next several months, it would be coming off a high level and remain more than sufficient to support a large current account surplus. Another strong report in the books does raise some doubt as to whether the Bank will ease at the next policy announcement.”