Canada’s trade deficit was reduced in October to C $ 1.47 billion – Update


OTTAWA – Canada's trade deficit with the rest of the world declined significantly in October, as exports recovered after four consecutive months of declines. Meanwhile, imports fell to their lowest level in almost a year.

The report marks a relief for Canadian exporters, after sales abroad fell sharply in the third quarter mainly due to disruptions in auto factories. The Bank of Canada has an improved export environment to help boost growth and counteract the expected weakness in real estate and household spending.

Canada's merchandise trade deficit in October declined from a month earlier to a seasonally adjusted figure of 1.47 billion Canadian dollars ($ 1.16 billion), Statistics Canada said on Tuesday. The trade deficit for the previous month was revised to C $ 3.36 billion from the previous estimate of C $ 3.18 billion. Market expectations were for a trade deficit of C $ 2.70 trillion, according to economists at the Royal Bank of Canada.

Exports rose by 2.7% in October to C $ 44.46 billion in broad-based profits, while imports fell by 1.6%, mainly due to lower demand for cars and light trucks. In terms of volume or adjusted price, exports increased by 1.2% while imports decreased by 3.9%, or the largest drop in a year.

Statistics Canada noted that the Canadian dollar lost 2.1 US cents on average relative to the US dollar from September to October. The Canadian currency lost ground after the Bank of Canada expressed caution about the impact that two increases in rates could have on indebted households. A weaker Canadian currency means that products manufactured in Canada become cheaper abroad.

Before the October report, exports decreased for four consecutive months. The data covering the third quarter indicate that exports fell by almost 8% on a non-annualized basis.

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In October, there were widespread gains among the export categories, led by industrial products such as plastic and rubber, an increase of 12.4%; Agri-food products, such as canola seed and canola oil, increased by 7.7%; and mineral products, such as refined gold, up to 4.5%. Canada's main export category, energy products, rose 2.7% to C $ 7.61 billion, and while the n. ° 2 on the list, motor vehicles and spare parts, advanced 1.2% to C $ 6.69 billion.

On a geographic basis, exports increased by 4.1% to the US, which turns out to be Canada's largest trading partner. Three-quarters of all Canadian exports go south to the US market. Excluding sales to the US UU., Exports fell 1.4% to C $ 11.14 billion.

Talks for a reform of the North American Free Trade Agreement have reached a stalemate, and Canada's chief trade negotiator has told lawmakers on Monday that some of the Trump administration's proposals are " totally unviable. " The uncertainty surrounding Nafta, and President Donald Trump's threat to withdraw from the pact, is one of the reasons why Bank of Canada officials have taken a cautious approach to rating the policy after two raises earlier this year. year.

Compensating the rebound in exports was a sharp fall in imports, or what Canada buys abroad. The data agency attributed half of the drop in imports to fewer shipments to Canada of motor vehicles and their parts. That category fell 8.1% to C $ 8.71 billion.

Write to Paul Vieira at [email protected]

(FINAL) Dow Jones Newswires

December 5, 2017, 09:37 ET (14:37 GMT)

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