Canada’s trade deficit unexpectedly widened for a second month in August as imports rose to a record, outweighing exports to the U.S. that reached the highest since the end of 2011.
The August deficit increased to C$1.31 billion ($1.27 billion) and July’s shortfall was raised to C$1.19 billion from an initial C$931 million, Statistics Canada said today in Ottawa. The deficit exceeded all 20 economist forecasts in a Bloomberg survey that had a median estimate of C$700 million.
The country’s 20th straight trade gap underscores Bank of Canada Senior Deputy Governor Tiff Macklem’s comments last week that a shift to growth led by exports and business investment is “elusive.” The bank has called the export recovery the slowest since World War II, hampered by a strong Canadian dollar and inconsistent global demand.
“Given what the Canadian economy requires at this point, it’s not a good sign,” Doug Porter, chief economist at Bank of Montreal’s Capital Markets unit in Toronto, said in a telephone interview. “We are still struggling to make significant gains in trade.”
The Canadian dollar weakened 0.5 percent to C$1.0367 per U.S. dollar at 4:24 p.m. in Toronto. One Canadian dollar buys 96.46 U.S. cents.
Imports rose 2.1 percent to C$41.1 billion in August, including a 12.5 percent rise in energy products and a 6.4 percent rise in passenger cars and light trucks. Aircraft imports rose 27.1 percent to C$1.35 billion.
Exports rose 1.8 percent to C$39.8 billion in August, with shipments to the U.S. up 1.9 percent to C$30.1 billion, the highest since December 2011. Canada’s trade surplus with the U.S. widened to C$3.99 billion from C$3.44 billion.
The volume of imports advanced 1.2 percent and export volumes rose 1.4 percent, Statistics Canada said. Volume figures adjust for price changes and can be a better indicator of how trade contributes to economic growth.
Canada will record deficits in the broader trade measure known as the current account through 2015, according to a Bloomberg economist survey taken last month. The current account covers trade in services as well as goods.
Next month’s report, scheduled for Nov. 5, could be impeded by a lack of U.S. data if the government shutdown in Washington continues, Statistics Canada said.
“A continued shutdown will impede Statistics Canada’s ability to release a complete picture of Canadian trade statistics for the September reference period,” Roland Boudreau, Statistics Canada’s director of its international trade division, said in remarks e-mailed from the agency’s Ottawa press office. “Specifically, data on Canadian exports to the United States would be unavailable.”