Canada increased its exports to the United States in August after two months of declines, helping shrink the country’s trade deficit more than expected in a welcome sign for third-quarter economic growth.
A 2.7% jump in shipments to the flagging U.S. market, which bought 74% of total Canadian exports, boosted Canada’s trade surplus with its neighbor for the first time in eight months, Statistics Canada said on Thursday. Passenger car sales led the rise in exports to the U.S.
The export rebound narrowed the overall trade deficit to C$1.35 billion ($1.35 billion) from a revised C$2.55 billion in July, compared with the market forecast of a C$2.40 billion shortfall.
A slowdown in the export sector this year due to anemic U.S. demand and a strong Canadian dollar, has fueled fears the economic recovery could stall. The August trade data was a rare sign of strength that could improve the outlook for growth.
Exports to all countries jumped 3.1% percent in August to C$33.98 billion, above the consensus forecast of C$33.00 billion. Industrial goods and materials led the gains, buoyed by high metals prices, followed by other consumer goods. All export sectors grew in August, except the auto sector where the increase in passenger car sales was not enough to offset declines in parts and other vehicles.
Fewer car imports pushed down overall imports by 0.5% to C$35.33 billion, slightly below the forecast of C$35.40 billion.
Summary statistics and links to the data files are on the Statistics Canada website athttp://www.statcan.gc.ca/daily-quotidien/101014/dq101014a-eng.htm. Export and import price indexes are at http://www.statcan.gc.ca/daily-quotidien/101014/dq101014c-eng.htm.