Canada Trade Deficit Widens in November on Import Surge

FeaturesDow Jones Newswires

Canada's trade deficit with the rest of the world widened in November as imports surged by the most in over eight years, due to 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.

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 previous month's trade deficit was revised slighly 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.

Continue Reading Below

Write to Paul Vieira at paul.vieira@wsj.com

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.

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%.

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%.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

January 05, 2018 09:05 ET (14:05 GMT)