Canadian trade deficit narrows in September

Canada’s trade deficit narrowed in the month of September, coming in at a deficit of CAD 0.98 billion, down from a revised deficit of CAD 1.24 billion in August. The deficit was a bit higher than the consensus expectations of a deficit of CAD 0.65 billion. Exports fell 1.3 percent to CAD 49.8 billion, while imports dropped 1.7 percent to CAD 50.8 billion.

Excluding the price impacts, export volumes dropped a more considerable 2.1 percent, whereas import volumes fell 1.6 percent. The fall in imports were seen in 7 categories out of 11. Fall in imports were driven by decline in imports of metals and non-metallic mineral products, other transportation equipment and parts, and metal ores and non-metallic minerals. Imports of industrial machinery were also soft.

Exports also dropped in 7 out of 11 categories. Drop in exports of metals and non-metallic mineral products and energy products drove the fall in exports. Providing some offset were stronger exports of consumer goods and the volatile “other transportation equipment and parts’ category.

Today’s report was disappointing, with widespread softness seen throughout the major export categories, noted TD Economics. It was a similar story for imports, including machinery and equipment, affirming the ongoing narrative of softer domestic demand.