Canada’s merchandise trade deficit narrowed in December as the value of car and light truck exports rose to the highest in more than a decade, evidence currency depreciation is fostering a long-awaited recovery.
The deficit of C$585 million ($425 million) followed a revised shortfall of C$1.59 billion for November, Statistics Canada said Friday in Ottawa. Still, the December trade figure cemented the all-time annual record for 2015, a year defined by a plunge in prices for exports such as crude and metals.
Commodity exports cratered along with prices last year while manufacturers were slow to take advantage of the 16 percent drop in the currency against the U.S. dollar and a budding American recovery. However Bank of Canada Governor Stephen Poloz said Jan. 20 he pulled back on plans to cut interest rates for a third time on signs that non-energy exports would restore solid growth.
Exports rose 3.9 percent to C$45.4 billion on the month, led by aircraft and automobiles, faster than a 1.6 percent gain for imports to C$45.9 billion. Economists surveyed by Bloomberg forecast the deficit would widen to C$2.2 billion.
Shipments of cars and light trucks jumped 7.5 percent to C$5.9 billion, the highest export value since 2000.
Exports of energy dropped by 26.5 percent to C$6.15 billion in December from a year earlier, Statistics Canada said.
The total 2015 deficit of C$23.3 billion was almost double the prior record of C$13.3 billion set in 2012, and was a swing from the 2014 surplus of C$4.8 billion.