BLOOMBERG, OCTOBER 6, 2020
Setback indicates recovery may have lost momentum sooner | Deficit narrowed slightly but missed median forecasts
By Shelly Hagan for Bloomberg – Canadian trade with the rest of the world dropped in August on lower car exports, suggesting the recovery may be losing steam sooner than economists had predicted.
Merchandise exports fell 1% in August, after jumping 42% between April and July, Statistics Canada said Tuesday in Ottawa. Imports decreased 1.2%. That leaves total trade at about 94% of pre-pandemic levels, a deterioration from July when it had rebounded to about 96%.
“The declines seen in two-way trade were troubling,” Royce Mendes, an economist at Canadian Imperial Bank of Commerce, said in a report to investors. The slowdown “showed up earlier than we had anticipated, and the drop in export volumes suggests that the recovery’s momentum could have slowed more than anticipated in August.”
Weakness was broad-based, with six of the 11 categories for both imports and exports retreating. Lower imports of aircraft and other transportation equipment contributed most to the downward move in August. In exports, fewer motor vehicle and parts shipments led declines.
The trade deficit narrowed slightly to C$2.45 billion ($1.85 billion) in August, from a revised C$2.53 billion in July. Economists had forecast a deficit of C$2.05 billion.
Statistics Canada cited work stoppages at the Port of Montreal for potentially lowering trade numbers.
— With assistance by Erik Hertzberg
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