Canada posted a smaller than expected trade surplus of C$1.57 billion ($1.17 billion) in November, as nuclear fuel and other energy products spurred an increase in imports while exports were dragged down by precious metals and aircraft, data showed on Tuesday.
Analysts in a Reuters poll had forecast a C$2 billion surplus. October’s surplus was upwardly revised to C$3.20 billion from C$2.97 billion initially reported.
Total exports fell 0.6%, while imports were up 1.9%, and overall it was the fourth consecutive monthly surplus, Statistics Canada said .
The decline in exports – the first since June – was mainly due to lower exports of unwrought gold, silver, and platinum group metals as well as exports of aircraft and other transportation equipment and parts.
Variations in gold asset transfers within the banking sector mainly resulted in the movement in the unwrought precious metals segment, Statscan said.
By volume, exports were down 0.1%.
On the imports side, energy products and industrial machinery were the main drivers of growth.
Under the energy segment, imports of nuclear fuel and other energy products increased the most, mainly on higher imports of uranium from Kazakhstan, Statscan said.
Imports of refined petroleum energy products also increased, due to higher imports of motor gasoline and aviation fuel from the United States, coinciding with outages reported in Canadian refineries in autumn. By volume, total imports were up 1.6%.
Imports of motor vehicles and parts and consumer goods declined however, in a sign of slowing demand.
The Bank of Canada said last month that labor market pressures had eased and growth stalled during the middle part of the year, leaving the economy no longer in excess demand.
Economic growth was flat in October, and Statscan has said gross domestic product likely rose 0.1% in November. The BoC has said the slowdown, which is expected to continue in 2024, is a sign that its monetary policy is working.
The bank’s next rate announcement is on Jan. 24, when it is expected to keep its key policy rate at a 22-year high of 5%. Money markets and economists expect the bank to start cutting rates in the first half of 2024.
($1 = 1.3366 Canadian dollars)