OTTAWA (Reuters) - Canada’s trade deficit more than doubled in November as exports declined for a fourth month in a row, dragged down by weak prices for crude oil and lower demand for chemicals, Statistics Canada said on Tuesday.
The deficit jumped to C$2.06 billion ($1.55 billion) from a revised C$851 million in October. Analysts polled by Reuters had expected a shortfall of C$1.95 billion.
“It’s really not a great news month,” Export Development Canada chief economist, Peter Hall, said in a phone interview.
Exports fell 2.9 percent as the value of crude shipped abroad plunged 17.7 percent on lower prices. Canada is a major exporter of oil and the Bank of Canada has expressed concern over the impact of slumping revenues.
Exports of basic and industrial chemical, plastic and rubber products dropped 7.5 percent as shipments of lubricants and other refinery petroleum products slumped by 26.4 percent on lower U.S. demand.
Hall said the state of industrial chemical exports was a gauge of how the economy was doing in the United States, which takes about three quarters of all Canadian exports.
“Purchasing managers in the United States remain upbeat but for some reason they’re not buying those key inputs to the industrial process. So we’re scratching our heads a little bit on that one,” he said.
The Bank of Canada - which has raised interest rates five times since July 2017 as the economy strengthened - is due to make its next policy announcement on Wednesday, and market operators say another rate hike is off the table.
Governor Stephen Poloz stressed that the pace of monetary policy tightening will rely heavily on economic data.
Fotios Raptis, senior economist at TD Economics, said mandatory oil production cuts in the energy-rich province of Alberta and slowing growth in foreign demand were “likely to continue to weigh on Canadian exports and economic growth in the months ahead.”
Imports also put in a largely unimpressive performance, dropping by 0.5 percent in November. Imports of motor vehicles and parts dipped 2.8 percent as demand for passenger cars and light trucks weakened for the ninth time in 12 months.
Imports of metal ores and non-metallic minerals slumped 18.6 percent in November, continuing their decline from a record high in September.
Reporting by David Ljunggren; Editing by Bernadette Baum