UPDATE 1-Canada June trade deficit shrinks, exporters still struggling

Tue Aug 6, 2013 8:34am EDT
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* Canada exports up by 1.4 percent, imports up 0.6 percent

* Deficit for first half of year second highest on record

OTTAWA, Aug 6 (Reuters) - Canada's trade deficit in June shrank as exports grew more than twice as fast as imports but the shortfall for the first half of the year was the second highest on record, reflecting the serious challenges exporters face.

The trade deficit - the 18th in a row - dropped to C$469 million ($451 million) from a revised C$781 million in May, Statistics Canada said on Tuesday. Analysts had predicted a deficit of C$500 million.

Canada's export sector, a key driver of the economy, has been hit by weak markets and a strong Canadian dollar. The cumulative trade deficit for the first half of the year was C$4.39 billion, the second highest January-June shortfall on record after the C$4.72 billion posted in 2012.

June exports grew 1.4 percent to C$39.57 billion, pushed up by higher shipments of unwrought precious metals, passenger cars and light trucks. Volumes grew by 2.1 percent while prices fell by 0.6 percent.

Imports advanced by 0.6 percent to C$40.04 billion on increased shipments of crude oil, crude bitumen and aircraft. Volumes dropped by 0.5 percent while prices grew by 1.1 percent.

Exports to the United States, which comprised 74.3 percent of all Canadian exports in June, grew by 1.5 percent, while imports dropped by 0.8. As a result the trade surplus with the United States advanced to C$3.79 billion from C$3.16 billion in May.