New stats show a sharp jump in the trade deficit
Canada’s trade deficit grew in August, reaching $3.4 billion from the $3.0 billion in July, as exports tumbled for the third month in a row.
Statistics Canada said Thursday that exports were down 1% to $43.6 billion and that the decrease was due to a 1.9% drop in volume rather than prices, which increased 1%. Excluding energy, volumes were down 1.4%.
Imports were flat.
The August figure follows large decreases in exports in July and June; in total there has been a 10.6% drop since May’s record high.
“After a rough two months, it got uglier for Canadian exports in August. The widening in the trade deficit to $3.4 bn was almost a billion wider than the street was looking for,” CIBC economist Nick Exarhos said.
He added that the data supports CIBC’s forecast for a significant slowdown in the economy in the third quarter and a pause on interest rate rises.
Digging deeper in the stats, exports of consumer goods fell 3.8% in August with pharmaceutical exports down more than 8%. Chemicals, plastic and rubber products were down 5.9% and metals fell 9.7%.
On a positive note, the US economy is showing recovery after the impact of the hurricanes and Exarhos says conditions support a slowdown rather than a collapse of Canadian exports in the second half of 2017.
“The current picture is one we’d like to forget, but fortunately it appears that the worst could be over for Canadian outbound shipments,” he said.
Statistics Canada said Thursday that exports were down 1% to $43.6 billion and that the decrease was due to a 1.9% drop in volume rather than prices, which increased 1%. Excluding energy, volumes were down 1.4%.
Imports were flat.
The August figure follows large decreases in exports in July and June; in total there has been a 10.6% drop since May’s record high.
“After a rough two months, it got uglier for Canadian exports in August. The widening in the trade deficit to $3.4 bn was almost a billion wider than the street was looking for,” CIBC economist Nick Exarhos said.
He added that the data supports CIBC’s forecast for a significant slowdown in the economy in the third quarter and a pause on interest rate rises.
Digging deeper in the stats, exports of consumer goods fell 3.8% in August with pharmaceutical exports down more than 8%. Chemicals, plastic and rubber products were down 5.9% and metals fell 9.7%.
On a positive note, the US economy is showing recovery after the impact of the hurricanes and Exarhos says conditions support a slowdown rather than a collapse of Canadian exports in the second half of 2017.
“The current picture is one we’d like to forget, but fortunately it appears that the worst could be over for Canadian outbound shipments,” he said.
