Wednesday, July 30th15.5°C
22568
21901

Imports, exports and trade deficit all rose in December: StatsCan

OTTAWA - Canada's trade deficit widened to $1.7 billion in December, worse than expected, as growth in imports outpaced export growth.

The rise in the deficit came as Statistics Canada also revised the November trade deficit Thursday to $1.5 billion compared with an initial estimate of $940 million.

Economists had expected the December trade deficit to come in at about $700 million, according to estimates compiled by Thomson Reuters.

"No doubt about it, the fourth quarter was a setback for Canada's export sector, with trade expected to weigh on economic growth," TD economist Leslie Preston wrote in a report.

"However, Canada's trade performance in the fourth quarter is inconsistent with both renewed economic momentum in the U.S. economy, and with indicators of production in Canada's economy."

Preston suggested the fourth quarter should prove a temporary setback with exports expected to be a key growth driver this year as stronger U.S. demand lifts exports.

Statistics Canada said Thursday merchandise imports grew 1.2 per cent to $41.4 billion with higher imports of energy products leading the way.

Meanwhile, exports increased 0.9 per cent in December to $39.7 billion as increases in most sectors were slightly offset by declines in energy products, farm, fishing and intermediate food products and motor vehicles and parts.

Exports to the United States rose 1.2 per cent to $30 billion, while imports declined 0.4 per cent to $27.1 billion. Canada's trade surplus with the U.S. rose to $2.9 billion from $2.4 billion in November.

Imports from countries other than the United States rose 4.3 per cent to $14.2 billion while exports to those countries were unchanged at $9.7 billion. The trade deficit with countries other than the U.S. totalled $4.5 billion in December, up from $4 billion in November.

Policy-makers and economists have been watching Canada's trade numbers with earnest in recent months as they look for signs of export-led growth in the economy.

"The surprisingly large increase in December's trade deficit provides further evidence supporting our view that Canada's economy isn't benefiting fully from the steadily improving US economy," said economist David Madani of Capital Economics.

However Preston noted net exports are on track to contribute to growth in 2013, for the first time since 2001.

"The transition to more export-led growth is underway, but it has not been smooth. Therefore, the (central) bank is likely to wait quite some time before removing further monetary stimulus," she said.

In its latest monetary policy report, the Bank of Canada noted last month there have been few signs of the anticipated rebalancing of the economy towards exports and business investment.

"That said, the U.S. recovery is becoming more broad-based, including higher investment spending by companies, and that, as well as the recent depreciation of the Canadian dollar, should help to boost exports. This, in turn, should lead to stronger business confidence and investment here in Canada," governor Stephen Poloz said.

Note to readers: This is a corrected story. An earlier version incorrectly stated Statistics Canada's initial estimate of the November trade deficit.

The Canadian Press


Read more Business News

22704


Recent Trending




Today's Market
S&P TSX15446.55+1.33
S&P CDNX1016.50-3.35
DJIA16912.11-70.48
Nasdaq4442.698-2.211
S&P 5001969.95-8.96
CDN Dollar0.9201-0.0016
Gold1310.00+6.70
Oil101.47+0.50
Lumber322.20-0.80
Natural Gas3.73-0.017

 
Okanagan Companies
Pacific Safety0.185-0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.20+0.05
Cantex0.085+0.02
Anavex Life Sciences0.2675+0.0025
Metalex Ventures0.085+0.005
Russel Metals35.29+0.14
Copper Mountain Mining2.86-0.11
Colorado Resources0.2250.00
ReliaBrand Inc0.10+0.019
Sunrise Resources Ltd0.035+0.015
Mission Ready Services0.155-0.035

 





FEATURED Property
1975352402-660 Lequime Road
2 bedrooms 2 baths
$395,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Take charge of your debt

Photo: Thinkstock.comWays to reduce your Debt:Make a budget and get budget counselingA basic first step for debt reduction is to prepare a budget and plan your spending. Once you have a budget, you mu...


Geopolitical tensions rattle markets

The Big Picture Geopolitical tensions rattle markets The spectre of rising geopolitical tensions in Ukraine and Gaza cast a shadow over an otherwise positive week in the markets. News that a passenger...


Learn to delegate effectively

Photo: ContributedI have the pleasure of witnessing people delegate tasks quite often. Sometimes with tremendous success and sometimes with disastrous consequences. I have chaired a lot of committees...

_








Member of BC Press Council


22707