UPDATE 1-Canada unexpectedly posts first trade surplus in 22 months

Wed Dec 4, 2013 8:37am EST
 
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* Canada posts modest C$75 million trade surplus

* Exports drop by 0.3 pct, imports down by 1.2 pct

OTTAWA, Dec 4 (Reuters) - Canada unexpectedly posted a trade surplus of C$75 million ($70.1 million) in October, the first in 22 months, as imports fell at a faster rate than exports, Statistics Canada data indicated on Wednesday.

Market operators had expected a trade deficit of C$730 million. The October surplus was the first since the C$2.43 billion posted in December 2011.

The Bank of Canada says there is still plenty of slack in the economy and regularly expresses concern about the important export sector, which is having trouble coping with weak markets and a strong Canadian dollar.

Exports fell by 0.3 percent on lower shipments of motor vehicles and parts, metal and non-metallic mineral products and aircraft and other transportation equipment.

Imports dropped by 1.2 percent on lower shipments of energy products and motor vehicles and parts.

Exports to the United States, which comprised 75.2 percent of all Canadian exports in October, grew by 0.2 percent while imports rose by 1.0 percent. As a result the trade surplus with the United States fell to C$3.93 billion from C$4.13 billion in September.