By Kim Mackrael
OTTAWA -- Canada's trade deficit widened to a record high in September as imports surged on the purchase of equipment for an offshore oil project on the country's east coast.
Canada posted a trade deficit in September of 4.08 billion Canadian dollars ($3.05 billion), Statistics Canada said Friday. That was significantly larger than the C$1.7 billion deficit economists expected, according to Royal Bank of Canada.
The previous month's trade data were revised to show a deficit of C$1.99 billion, slightly larger than the previous C$1.94 billion estimate.
Canadian imports surged 4.7% in September to C$47.63 billion on a sharp increase in the industrial machinery, equipment andparts sector. Statistics Canada attributed the gain to a large import of a module from South Korea, which it said was destined for the Hebron offshore oil project in the east coast province of Newfoundland and Labrador.
Import volumes were up 2.3% in the month, the data agency said.
Meanwhile, exports edged up 0.1% to reach C$43.55 billion in September, marking the fourth straight monthly gain. On a volume basis, exports were down 0.8% from the previous month.
Higher exports of aircraft and other transportation equipment and parts were offset, in part, by lower exports of metal and non-metallic mineral products, Statistics Canada said.
Excluding energy products, exports were down 0.2% in September.
The Bank of Canada warned recently that exports have "persistently lagged" behind its forecasts. Policy makers hoped a weaker Canadian dollar would boost foreign demand, but export data so far this year has disappointed.A lower profile for exports, which the central bank has now incorporated into its growth forecast, could trim Canada's real gross domestic product by about 0.6% by the end of 2018, Governor Stephen Poloz said last month.
The September trade data comes several days after Statistics Canada said the country's gross domestic product rose 0.2% in August from the previous month, matching economists' expectations on strong growth in the mining, quarrying and oil-and-gas sector.
Write to Kim Mackrael at firstname.lastname@example.org
(END) Dow Jones Newswires
November 04, 2016 09:44 ET (13:44 GMT)
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