Canadian trade deficit widens to $2.5B, though autos emerge as one bright spot
OTTAWA—After two months of strong gains in the export market – a 2.3 per cent July bump and a 6.3 per cent June increase – Canadian shipments have stalled.
Canada’s exports declined 3.6 per cent through August as imports inched up 0.2 per cent, Statistics Canada has reported. As a result, the country’s trade deficit, which had narrowed to $817 million through the summer, has ballooned back to $2.5 billion.
Weak energy products exports led the overall decline, dropping 14.7 per cent, almost entirely as a result of the sustained low crude oil prices. Consumer goods also declined, however, dipping 8 per cent to $5.9 billion on lower volumes. Notably, pharmaceutical and medicinal products also declined 16.1 per cent in August.
Meanwhile, the auto industry recorded strong growth, mitigating some of the decline in other areas. Vehicle and parts shipments were up 3.1 per cent to $7.8 billion.
“This increase was almost entirely the result of higher exports of passenger cars and light trucks,” Statistics Canada said.
Metal ores and non-metallic minerals also charted strong gains, adding 15.7 per cent.
On a regional basis, Canadian exporters struggled across the board. Exports to the U.S. fell 3 per cent to $33.7 billion, narrowing the country’s trade surplus with its largest trading partner to $2.9 billion from $3.7 in July. Internationally, exporters fared even worse, as shipments declined 5.5 per cent, largely due to drastically lower imports to the U.K.
The weak performance missed economists’ expectations. According to Thomson Reuters, Canada’s deficit was expected to be $1.2 billion for the month.