Published: Sun, July 08, 2018
Economy | By

Canada trade deficit expands as imports rise, exports edge down

"While Canada's trade deficit was larger than expected in May, the deterioration was mostly due to temporary factors", notes National Bank Financial's Jocelyn Paquet.

Analysts in a Reuters poll had predicted a shortfall of C$2.05 billion. Exports increased $84.5 billion or 8.8 percent. In the meantime, import volumes rose 1.2 percent on the month. After struggling through the middle part of past year, exports had seen a revival in recent months due to a run-up in oil prices and stronger demand for non-energy exports. May's report marked just the second time in eight months that exports did not rise.

"Turning to exports, delayed deliveries of engines and other auto parts from the USA suppliers created bottlenecks at Canadian assembly lines and hampered worldwide shipments in the motor vehicles/parts category".

Canada's trade deficit in May grew to $2.77-billion from $1.86-billion in April on a sharp rise in imports of airliners and gasoline while exports edged down, Statistics Canada said on Friday.

Exports were off slightly for the month, falling 0.1 percent to Can$48.3 billion, on a 3.6 percent decline in sales of motor vehicles and auto parts.

"Over the first five months of 2018, exports of passenger cars and light trucks were down 14.6 percent compared with the same period in 2017", Statistics Canada said.

At 18:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was bearish at -76.5289, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -81.7617.

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