Canada’s merchandise trade balance recorded its largest surplus since October, driven by a strong increase in gold shipments to Switzerland and the UK.

The country’s trade surplus widened to C$1.39 billion ($1 billion) in February, from C$608 million a month earlier, Statistics Canada reported Thursday in Ottawa. Economists had been expecting exports to exceed imports by C$680 million in February.

Total exports jumped 5.8% that month, the largest percentage increase since August 2023, while total imports rose 4.6%. In volume terms, exports were up 6.2% and imports grew 4.1%.

More than half of the export growth was driven by a sharp rise in exports of unwrought gold, with increased high-value shipments of refined gold and transfers of gold assets in the banking sector. This increase coincided with a rise in the market price of gold at the end of February.

Excluding the product group for unwrought gold, exports were up 2.8%.

Exports of farm, fishing and food products rose 9.7% in February, the strongest percentage increase observed since July 2023, while shipments of motor vehicles and parts rose 3.8%.

Imports reached their highest level since June 2023. Imports of electronic and electrical equipment and parts increased 9.7% to a record C$7.6 billion. The increase was led by imports of high-value data processing units from the US, which are generally used for the development of complex cloud systems.

Imports of consumer goods were up 3.3%, with clothing, footwear and accessories seeing the largest increase. Imports of energy products rose 10.2%, led by crude oil imports.

The increase in trade volumes is a positive sign for broader economic activity, Benjamin Reitzes, rates and macro strategist at Bank of Montreal, said in an email.

“This report helps explain the strength seen in the flash estimate of February GDP, and likely acceleration in Q1 GDP growth,” he said.

The increase in the surplus so far this quarter is “showing that net trade is driving growth,” Katherine Judge, economist at Canadian Imperial Bank of Commerce, said in a report to investors.