(Bloomberg) -- Canada's trade deficit unexpectedly widened to a record in March as a surge in automobile imports outpaced a rebound for the nation's exporters.
The merchandise trade deficit widened to C$4.14 billion from C$2.93 billion a month earlier, Statistics Canada reported Thursday in Ottawa. Economists predicted the March figure would narrow to C$2.25 billion.
The figures represent a mixed picture for the trade sector. Policy makers will be reassured by a rise in exports and signs of dissipating railway bottlenecks, while the jump in imports implies trade acted as a major drag on first-quarter growth.
Imports rose 6 percent to a record C$51.7 billion in March, while exports jumped 3.7 percent to C$47.6 billion. In volume terms, imports rose 5.3 percent, which was the biggest increase since 2009. Exports were up 3 percent, the biggest one month gain since July 2016.
Purchases of cars and consumer goods were responsible for the jump in imports. The auto sector recorded an 8.3 percent jump in imports, the strongest since 2011. Consumer goods imports jumped 7.7 percent to a record high.
Exports also recorded strong gains in March, after weakness in the previous three months, led by aircraft and agriculture. Farming-related products were up 14.7 percent, offsetting a sharp decline in February that coincided with rail disruptions. Wheat exports were up 52 percent.
Other Highlights
- For the first quarter, imports rose 2.1 percent, with exports up 1 percent and the country running a record trade deficit of C$9.1 billion. In volume terms, imports rose 1.5 percent in the quarter, while exports grew 0.3 percent
- Imports of industrial machinery and equipment -- a gauge of business investment -- rose a solid 3.2 percent, but the increase was mostly price related. In volume terms, these imports were up 0.7 percent, the largest in three months
- Electronic-related imports -- another indicator of business sentiment -- rose 4.4 percent in March, and were up 4.2 percent in volume terms, the biggest gain in four months
--With assistance from Erik Hertzberg
To contact the reporter on this story: Theophilos Argitis in Ottawa at targitis@bloomberg.net.
To contact the editors responsible for this story: Theophilos Argitis at targitis@bloomberg.net, Greg Quinn
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