Canada’s trade surplus with the rest of the world narrowed in July as lumber exports plunged.

The country’s merchandise trade surplus was $778 million (US$617 million) in July from a revised $2.6 billion in June. Economists were predicting a surplus of $1.7 billion in July, according to the median estimate in a Bloomberg survey.

Exports rose 0.6 per cent, hitting a record $53.7 billion. Exports of lumber and other sawmill products dropped 24 per cent on lower prices.

Imports rose 4.2 per cent, also to a record, on the back of a surge in car shipments.