Canada's Trade deficit falls sharply to $81M

CBC News

Higher exports coupled with sharply lower imports helped narrow Canada's trade deficit to $81 million in November, well off the $1.5 billion level for October. Analysts had been expecting the trade deficit to be $2.2 billion during the month, BMO economist Doug Porter noted.

Imports declined 3.2 per cent to $34.4 billion during the month, Statistics Canada reported, while exports increased 0.8 per cent to $34.3 billion. Energy products and machinery and equipment were the main factors behind the decrease in the value of imports, while imports of industrial goods and materials rose. The 15 per cent dive in energy imports explains much of the large jump was only temporary, BMO economist Doug Porter noted.

'A fluke'

Exports to the United States increased 0.6 per cent while imports fell 5.1 per cent, reflecting a drop in imports of automotive products. Consequently, Canada's trade surplus with the United States rose to $3.0 billion in November from $1.7 billion in October.Exports to countries other than the United States grew 1.1 per cent, a fifth consecutive month of increases, while imports remained virtually unchanged. As a result, Canada's trade deficit with countries other than the United States declined from $3.2 billion in October to $3.1 billion in November.

Prior to the economic slowdown in 2009, trade deficits were extremely rare for Canada.

"The steep drop in Canada’s trade deficit may be a fluke," Porter said. "However, exports are poised to benefit from resurgent commodity prices and firming U.S. spending. We may have seen the peak in Canada’s trade deficit for this cycle in Q3."

Read more: http://www.cbc.ca/money/story/2011/01/13/trade-deficit-november.html#ixzz1AxRP56Vg