Canada Posts Trade Deficit as Both Exports and Imports Decline

(Bloomberg) -- Canada’s economy continued to show sluggish trade flows in September with both exports and imports recording back-to-back monthly drops. The statistics agency also revised away its previously reported surplus from August.

The nation posted a C$416 million trade deficit in September, down from a revised C$551 million deficit in August as exports slumped less than imports. Exports were down 0.2 percent, after dropping 1.5 percent in August, while imports were down 0.4 percent. Economists predicted a September surplus of C$200 million.

Statistics Canada made a large revision of its August import numbers to account for the late documentation of three icebreakers. The change meant the country ran a deficit that month instead of a previously reported C$526 million surplus.

The trade picture in September is still consistent with what the economy has seen in recent months -- an improving trade balance driven largely by fewer purchases of goods from abroad. Canada’s trade deficit was C$2.7 billion in May. In real terms, which strip out price changes, imports fell 1.5 percent in September and exports were down 1.2 percent.

For all of the third quarter, exports were up 2.6 percent versus a 6 percent gain in the second quarter. The increase was all price gains, with export volumes down 0.3 percent in the three month period.

Third-quarter imports were down 0.1 percent, with volumes falling 1.2 percent.

--With assistance from Erik Hertzberg.

To contact the reporter on this story: Greg Quinn in Ottawa at gquinn1@bloomberg.net

To contact the editors responsible for this story: Theophilos Argitis at targitis@bloomberg.net, Chris Fournier

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