Exports, imports down in October, trade surplus hits $75M
Transportation related industries contributed to the decline in exports: Statistics Canada.
OTTAWA — Statistics Canada says the country’s merchandise imports declined 1.2% and exports decreased 0.3% in October.
The agency says that pushed the trade balance with the world to a $75 million surplus from a $303 million deficit in September.
Imports declined to $40.4 billion as lower imports of energy products and motor vehicles and parts were partially offset by higher imports of basic and industrial chemical, plastic and rubber products.
Exports decreased to $40.5 billion with lower shipments of motor vehicles and parts, metal and non-metallic mineral products and aircraft and other transportation equipment and parts.
Imports from the US grew 1% to $26.5 billion and exports rose 0.2% to $30.4 billion, reducing that trade surplus to $3.9 billion from $4.1 billion in September.
Imports from countries other than the US fell 5.1% to $13.9 billion and exports to those countries slipped 1.7% to $10.1 billion, shrinking that trade deficit to $3.9 billion from $4.4 billion in September.
Leslie Preston, an economist with TD Economics, observed in a bulletin that despite October’s export decline, on a year-on-year basis total exports were up a healthy 5.3%, and exports to the US were up almost 10%. “Moreover, many export industry categories are currently running healthy double-digit year-on-year increases in October.”
Preston says exports carried decent momentum heading into the fourth quarter, and TD Economics expects net exports to contribute positively to real GDP growth in the final quarter of the year.
“However, the result owes largely to declining import volumes which raises some red flags about Canada’s economy, specifically business investment, says Preston. “Purchases of machinery and equipment by businesses are often imported, and are down nearly 9% over last year. That points to softness in business investment in Q4, and a lack of confidence about future demand.”
Preston says data are consistent with net exports making a stronger contribution to growth from now on. “Despite what appears to be very weak growth in the United States in Q4, manufacturing confidence measures continue to improve, and we expect these to have positive knock on effects to demand for Canada’s exports going forward.”
© 2013 The Canadian Press