OTTAWA (Reuters) - Canada’s trade deficit jumped to a record high C$3.02 billion ($2.50 billion) in March from February as imports surged and weak crude prices helped curb exports, Statistics Canada data showed on Tuesday.
Traders had forecast a deficit of C$850 million. Statscan revised February’s deficit sharply higher to C$2.22 billion from an initial C$984 million, citing a sharp downward revision in energy exports.
Canada, a major energy exporter, has been hit hard by the plunge in oil prices and March marked its sixth consecutive monthly trade deficit.
Analysts said the data was not necessarily as worrisome as it seemed, noting a healthy increase in non-energy exports and other positive factors.
“With our neighbor to the south expected to bounce back in the second quarter, the (Canadian dollar) staying relatively weak ... and oil prices staging a modest comeback, Canada’s trade profile is expected to improve in the months ahead,” said BMO Capital Markets economist Benjamin Reitzes.
The value of exports, hurt by a prolonged slump in the price of oil, edged up 0.4 percent to C$42.50 billion. Exports of energy products fell by 8.9 percent, largely offsetting an 11.7 percent increase in shipments of motor vehicles and parts.
Excluding energy products, exports rose by 2.4 percent in March.
Export Development Canada chief economist Peter Hall said he was encouraged by higher exports of vehicles and forestry products in March but expressed concern about weaker machinery and equipment shipments.
“So a bad month (in equipment) but not a bad story overall. We see that picking up,” he said in an interview.
Imports rose by 2.2 percent to C$45.52 billion as seven of 11 sectors tracked by Statscan increased. Imports of consumer goods soared by 7.9 percent, while imports of motor vehicles and parts rose 3.7 percent.
The Canadian dollar initially sank against the U.S. dollar after release of the data, but quickly strengthened on Tuesday’s stronger crude prices. At 10:48 a.m. EDT (1448 GMT), it was trading at C$1.2023 to the greenback, or 83.17 U.S. cents, up from Monday’s close of C$1.2092, or 82.70 U.S. cents.
Exports to the United States, which accounted for 74.0 percent of Canada’s global total in March, fell by 1.7 percent, while imports dropped 0.9 percent. As a result, Canada’s trade surplus with the United States rose to C$2.18 billion from C$1.95 billion in February.
Editing by Jeffrey Benkoe; and Peter Galloway