December 5, 2019 / 3:00 PM / 8 months ago

UPDATE 1-Canada's trade deficit narrows in October as both exports and imports rise

 (Adds economist quotes and details throughout)
    By Fergal Smith
    TORONTO, Dec 5 (Reuters) - Canada posted a slightly narrower
trade deficit in October as both exports and imports climbed,
Statistics Canada said, data that could support the Bank of
Canada's greater confidence in the outlook for economic growth.
    Canada posted a trade deficit of C$1.08 billion ($0.82
billion) in October, less than the C$1.37 billion deficit that
analysts had forecast. The September deficit was revised upward 
to C$1.23 billion.
    Exports rose by 0.8% to C$49.9 billion, while imports were
up by 0.5%.
    "Trade remains sturdy and unlikely to add or subtract
meaningfully from Q4 growth," Robert Kavcic, a senior economist
at BMO Capital Markets, said in a note. "There’s little here to
alter this week’s Bank of Canada tone, which has shown
increasing disinterest in cutting rates."
    On Wednesday, Canada's central bank held its overnight
interest rate at 1.75% as expected and cited early signs the
global economy was stabilizing.             
    The impact of a strike at U.S. auto manufacturer General
Motors Co        was evident in the trade data, with both
exports and imports of motor vehicles and parts falling.
    Exports of consumer goods rose 5.5% in October, helped by
higher exports of artwork destined for an art fair in New York.
Statistics Canada said those items could be brought back and
included as imports if they do not sell.
    Energy product exports were up 3.4% as a result of higher
prices, while imports of energy products jumped 8.9%.
    Export volumes rose 0.7%, while import volumes were up 
0.8%.
    Canada's trade surplus with the United States increased to
its widest since the financial crisis of 2008 at C$5.5 billion
from C$4.9 billion in September.
    Exports to China were down 19.3% at C$1.6 billion, the
biggest decrease since 2012 and the lowest level in more than
five years.
  ($1=$1.3178 Canadian) 

 (Additional reporting by Dale Smith in Ottawa; Editing by Steve
Orlofsky)
  
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