(Bloomberg) -- Canada’s trade deficit widened more than expected to start the year, with collapsing shipments highlighting the country’s struggling export sector.
Exports of merchandise goods fell 2% in January, the largest decline since June of last year, Statistics Canada reported Friday from Ottawa. The declines were widespread, with 9 of 11 product categories falling on the month, led by a 4.1% drop in motor vehicle shipments. Energy was also weak, underlined by a 26.2% decline in natural gas shipments. Imports fell 0.5%, the agency said.
The falling exports pushed Canada’s trade deficit with the world to C$1.47 billion, notably wider than the C$780 million gap economists surveyed by Bloomberg were expecting. Some of the export declines can be attributed to extended production slowdowns at auto assembly plants and unseasonably warmer U.S. weather crimping natural gas exports, Statistics Canada said.
Still, the broadly weak trade print will add to concerns about the fragile state of Canada’s economy ahead of the spreading risk of the coronavirus. Goods exports represent around a quarter of the nation’s economy, and their lack of growth over the last year may trouble policymakers.
Stripping away price effects, exports fell 3.1%, the biggest pullback in nearly a year. Import volumes declined 0.5%.
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