Canada’s merchandise trade deficit was narrower than economists forecast in November with shipments of automobiles and metals leading the first export gain in four months.
The deficit of $1.99-billion followed an October shortfall that was pared to $2.49-billion from the initial reading of $2.76-billion, Statistics Canada said Wednesday in Ottawa. Economists surveyed by Bloomberg forecast a November deficit of $2.6-billion, based on the median of 15 estimates.
Exports climbed 0.4 per cent to $43.3-billion following three prior declines. Sales of motor vehicles and parts rose 5.9 per cent to $7.94-billion, followed by a 20.4 per cent jump in metals ores and non-metallic minerals to $1.77-billion, and a 5.5 per cent gain in forestry products and packaging materials to $3.45-billion.
The gains in non-energy exports are what Bank of Canada Governor Stephen Poloz is counting on to drive a recovery and fulfill his prediction the economy will return to full output by mid-2017. Falling energy sales and investment led him to cut interest rates twice last year, and crude prices now at about $36 are pressuring him to act again.
The November report does little to undo what was a year of woe for Canada’s exporters. The deficit for January to November of $22.8-billion shatters the previous comparable record of $12.9-billion set in 2012.
The main culprit has been a drop in prices for exported energy. Energy shipments fell 6.6 per cent in November to $5.92-billion, capping a slide of 40.4 per cent over the prior 12 months.
