(Bloomberg) -- Canada's trade deficit narrowed in April to the lowest in six months, as exports continue to rebound from a recent slump.
The nation's trade gap narrowed to C$966 million ($721 million), from a downwardly revised C$2.3 billion deficit in March, Statistics Canada said Thursday in Ottawa. Exports rose 1.3% in April, driven by a surge in gold shipments, after a 4.4% gain in March. Imports, meanwhile, declined.
Key Insights
- Canada's ability to recover from its recent soft patch will in large part hinge on a recovery in exports, and signs are pointing to renewed strength after a brutal winter for the sector. In March and April, exporters posted the strongest two-month gain in shipments since the end of 2017 while the back-to-back gain is the largest in three years in volume terms
- The data suggest the trade sector is on track to add to growth in the second quarter. Export volumes rose 2% in April, while import volumes were down 1.9%. The large trade gap in volume terms in the first quarter was the main reason why Canada's economy stalled in the first three months of 2019
- March was also a better month for exporters than initially estimated. Statistics Canada revised up nominal exports by about C$1 billion for the month
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- In nominal terms, imports fell 1.4% in April, after gaining 2.8% in March
- Economists surveyed by Bloomberg News were anticipating a trade deficit of C$2.8 billion in April, from an initially reported C$3.2 billion gap in March
- Six of 11 export sectors posted export increases in April, led by a sharp increase in metal shipments due to a large sale of gold
- Falling canola shipments was negative for a farming sector that otherwise saw strong gains during the month. They were down nearly 15% after China halted shipments from Canada
- The energy sector showed a mixed picture, with a strong 12% increase in crude oil more than offset by a sharp 46% decline in natural gas exports. Overall, energy products posted a 0.5% drop in exports during the month
- Car exports were also down in April, falling 4.6%, due to “atypical” shutdowns at some assembly plants
--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, Stephen Wicary
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