Canada’s trade deficit unexpectedly widened in November, as a restart of some auto production fuelled imports. The higher deficit masked a gain in exports.
Imports surged 5.8 per cent in November, the biggest increase since July 2009. The increase in shipments widened the deficit to $2.5 billion from $1.6 billion a month earlier, Statistics Canada said Friday.
While widening trade deficits can act as a drag on growth and be perceived as a vulnerability, rising imports may also reflect robust domestic demand. A rise in exports meanwhile -- up 3.7 per cent in November -- also suggests Canada is beginning to break out of a slump in shipments to the rest of the world.
The increase in imports in November was led by a 5.4 per cent jump in auto-related imports. Imports of motor vehicle engines and parts rebounded following planned shutdowns and work stoppages. General Motors idled some plants in Ontario during the later summer and early fall while for four weeks in September and October, Unifor struck the automaker's Ingersoll, Ont., plant where the popular Equinox is made.
The 3.7 per cent gain was the biggest monthly export gain since November 2016, and followed a 2.3 per cent gain in October.
Exports in recent months had suffered one of their biggest tumbles ever, fuelling concern the nation’s currency accelerated too quickly earlier this year. A recent drop in the Canadian dollar though may be providing some relief.In volume terms, adjusting for price changes, imports rose five per cent in November. Export volumes were up 0.6 per cent