Canada Reports Unexpected C$924 Million April Trade Gap, Revises Exports
Canada had an unexpected trade deficit in April on a drop in foreign sales of transportation equipment such as aircraft. Statistics Canada also revised data for the prior two months, turning surpluses into deficits.
The trade gap was C$924 million ($945 million) in April, the widest in six months, the Ottawa-based agency said today. Economists forecast a C$600 million surplus according to the median estimate in a Bloomberg survey of 24 economists.
The March trade balance was revised to show a C$417 million deficit instead of an earlier estimated C$627 million surplus, and the February figure was changed to a C$216 million deficit from a C$356 million surplus. The January surplus estimate was increased to C$2 billion from C$1.4 billion. Statistics Canada said most of the changes were due to delayed reporting of oil and gas shipments.
“To slice a billion off the trade surplus, that’s a pretty hefty revision,” Robert Kavcic, a Bank of Montreal economist in Toronto, said of the net change over the last few months. “The second quarter is definitely going to be quite a bit slower than the first.”
Canada’s economic growth rate will slow to 2 percent this quarter from 3.9 percent between January and March in part because of auto production disruptions linked to natural disasters in Japan, the Bank of Canada predicts. The trade balance has recovered from a record deficit of C$2.3 billion set in September.
The Canadian dollar rose 0.1 percent to 97.81 cents per U.S. dollar at 9:42 a.m. in Toronto from 97.93 yesterday. One Canadian dollar buys $1.0224.
Exports fell 1.9 percent to C$36.3 billion in April, led by machinery and equipment such as aircraft, Statistics Canada said today.
Imports fell 0.6 percent to C$37.2 billion in April, as the disruptions in Japan triggered a 21.9 percent drop in automobiles and car frames to C$1.6 billion.
The volume of imports, which excludes the impact of price changes, rose 1 percent. Export volumes fell 1.1 percent. The trade deficit was a record after adjusting for inflation, Kavcic said.
Japan’s output interruptions will “restrain growth sharply” in Canada this quarter while Europe’s expansion is “maintaining momentum” even as risks in some peripheral economies have “increased,” the Bank of Canada said in an interest rate announcement last month.
The trade surplus with the U.S., Canada’s largest trading partner, narrowed to C$3.9 billion in April from C$4.2 billion in March. Canada sends about 75 percent of its exports to the U.S.
In a separate report, Canada’s statistics agency said its index of new home prices rose 0.3 percent during the month of April. Economists surveyed by Bloomberg News had estimated a 0.1 percent increase, the median of 12 forecasts.
To contact the reporter on this story: Greg Quinn in Ottawa at email@example.com