OTTAWA – Canada's trade deficit with the rest of the world widened in November as imports surged at their fastest pace in more than eight years on demand for new cellphone models and a ramp-up in Canadian auto-assembly factories. Exports also posted a strong increase for a second straight month.
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Canada's merchandise trade deficit in November swelled from the previous month to a seasonally adjusted 2.54 billion Canadian dollars ($2.03 billion), Statistics Canada said Friday. The October trade deficit was revised slightly upward, to C$1.55 billion. Market expectations were for a trade deficit of C$1.10 billion, according to economists at Royal Bank of Canada.
The bigger-than-anticipated trade deficit in November was due to a strong 5.8% increase in imports, to C$48.75 billion, the biggest one-month gain since July 2009. On a volume, or price-adjusted basis, imports rose 5%.
Imports of electronic and electrical equipment rose 10.9% to C$5.76 billion. The introduction of new cellphone models in the midst of the holiday-shopping season helped fuel the growth in this category, the data agency said. Other categories recording strong import growth were motor vehicle and parts, up 5.4%; industrial machinery and equipment, up 6.1%; and aerospace, up 18.7%.
Meanwhile, exports advanced 3.7% to C$46.21 billion, which marks the second straight month-over-month increase after four consecutive declines. The data agency said the gain was mostly attributable to higher sales abroad of motor vehicles and parts, as they climbed 14.6% to C$7.68 billion. Activity in the auto sector picked up steam after some factories in September and October closed for either maintenance upgrades or work stoppages.
On a volume, or price-adjusted basis, exports rose a meager 0.6%; excluding the auto component, volumes fell 1.4%.
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Energy products, which remains Canada's top export category, rose 2% on a nominal basis to C$7.85 billion. Excluding energy, Canadian exports rose 4.1%.
On a geographic basis, exports to the U.S. rose 5.4%. Three-quarters of all Canadian exports head south to the American market. Excluding sales to the U.S., exports fell 1.4%. Meanwhile, Canadian imports of U.S. goods climbed 6.5%.
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(END) Dow Jones Newswires
January 05, 2018 09:05 ET (14:05 GMT)