Canada’s merchandise trade deficit more than doubled in November as exports fell led by a drop in crude oil prices.
Statistics Canada said Tuesday that the country’s trade deficit increased to $2.1 billion in November compared with $851 million in October.
Economists had expected a deficit of $1.95 billion, according to Thomson Reuters Eikon.
« As expected, weaker domestic energy prices, culminating in production cuts, helped drive down crude oil exports in November, » TD Bank senior economist Fotios Raptis wrote in a report.
Total exports fell 2.9 per cent to $48.3 billion in November, the fourth consecutive monthly decline, as exports were down in eight of 11 sections.
Exports of energy products fell 9.2 per cent to $8.4 billion in November as crude oil exports fell 17.7 per cent due to a drop in prices. Excluding energy products, exports fell 1.4 per cent.
Imports also down
Meanwhile, total imports fell 0.5 per cent to $50.4 billion in November as imports dropped in seven of 11 product sections.
Imports of motor vehicles and parts fell 2.8 per cent to $8.9 billion, while imports of metal ores and non-metallic minerals fell 18.6 per cent to $1.1 billion.
Stephen Brown, senior Canada economist at Capital Economics, noted that non-energy export volumes fared poorly.
Export volumes dropped 1.8 per cent in November while import volumes fell 0.3 per cent.
« As things stand, net trade is on track to have made a neutral contribution to GDP growth in the final quarter, » Brown wrote in a report.
« With global and U.S. economic survey indicators softening in recent months, non-energy export volume growth looks set to slow this year. »
The trade data came ahead of the Bank of Canada’s interest rate announcement on Wednesday.
The central bank is expected to keep its key interest rate on hold when it releases its decision and updates its outlook for the economy in its monetary policy report.