OTTAWA (Reuters) – Canada’s exports and imports rose in September, though both remain below pre-pandemic levels, while the country’s trade deficit widened more than expected, data from Statistics Canada showed on Wednesday.
The trade deficit widened to C$3.25 billion ($2.47 billion), missing analyst predictions of C$2.6 billion, with August’s deficit also upwardly revised to C$3.21 billion from an initial C$2.45 billion.
“Canada’s trade gap has widened notably through the pandemic,” said Benjamin Reitzes, Canadian Rates & Macro Strategist at BMO Capital Markets, in a note. “With energy prices remaining low, it’s going to be difficult to meaningfully narrow the gap in the short term.”
“On the bright side, the rise in overall trade activity bodes well for the economy in September,” he added.
Imports rose by 1.5%, mainly on higher crude oil imports, while exports were up 1.5%, led by lumber and aircraft. Eight out of 11 export product sections increased, with non-energy exports up 2.2%, Statscan said.
Exports to the United States, Canada’s largest trading partner, declined 1.6%, while imports rose 1.2%. With the outcome of the U.S. presidential election still unclear, analysts expected little immediate impact on trade.
“Circumstances mean that the U.S. is generally in a protectionist state at the moment,” said Peter Hall, chief economist at Export Development Canada, noting that will likely continue to be the case no matter who wins.
“I think that we’re just in a mode at the moment where trade uncertainly with our key trading partner is there, has to be dealt with, has to be worked through,” he added.
The Canadian dollar <CAD=> was down 0.3% at 1.3166 to the greenback, or 75.95 U.S. cents, as the tight U.S. election reduced prospects of a large stimulus package.
Exports of lumber reached their highest level in 14 years, while aircraft exports jumped on higher shipments of business jets.
(Reporting by Julie Gordon in Ottawa, Additional reporting by Dale Smith and Steve Scherer; Editing by Steve Orlofsky and Sandra Maler)