Canada’s merchandise trade deficit held near a record high in May, bucking forecasts the shortfall would narrow and adding to a run of weak second-quarter data.
The deficit of C$3.28 billion ($2.52 billion) followed an April figure that was boosted to a record C$3.32 billion, Statistics Canada said Wednesday in Ottawa. Economists expected the May deficit to come in at C$2.7 billion, based on the median of 15 forecasts in a Bloomberg survey.
Exports fell 0.7 percent to C$41.1 billion and imports by 0.8 percent to C$44.4 billion. Both declines were the third in four months.
“There is no mistake that the 2016 second-quarter performance is a vividly disappointing one,” Jimmy Jean, a strategist in the fixed-income group at Desjardins Capital Markets in Montreal, wrote in a research note.
Statistics Canada also outlined how the oil industry responded to wildfires in Alberta, which knocked 1 million barrels a day of production offline. Energy exports rose 7.1 percent in May and imports climbed by 18.2 percent, the agency said, noting companies appear to have shifted their focus to exporting crude instead of refining it locally.
Bank of Canada Governor Stephen Poloz, who makes his next rate decision July 13, has signaled the economy may have shrunk in the second quarter because of the oil disruption and said output will likely rebound this quarter as production resumes. He is counting on companies outside the energy sector to lead a recovery.
Non-energy exports fell 1.8 percent in May, but are up 2.3 percent from a year earlier. Exports of metals declined 5.4 percent from a month prior; machinery and equipment shipments were down 4.9 percent.
Canada’s dollar weakened 0.3 percent to C$1.3023 per U.S. dollar at 9:45 a.m. in Toronto after the trade report was released.