Statistics Canada came out this morning with more interesting numbers, this time, noting that our trade deficit with the rest of the world shrank during September.
The September merchandise trade report showed a better-than-expected improvement to $0.4 billion from August shortfall of $1.1 billion (previously estimated as $1.3 billion). Market expectations going into the report was for a much more modest improvement to $1 billion. The improvement largely occurred as exports jumped $0.71 billion (1.8%) with imports providing only a modest offset rising only $0.06 billion (0.2%).
The increase in exports was largely concentrated in two components with energy exports rising $0.4 billion (4.6%) and aircraft exports up $0.2 billion (17.4%). Most other components were relatively steady in the month. In contrast, though overall imports were relatively steady in the month there were some significant, though largely offsetting, movements among a number of the components. Upward pressure in imports was led by gains in the energy ($0.3 billion or 7.3%) and consumer goods ($0.2 billion or 2.2%). The offset was led by declines in industrial chemical, plastic and rubber products ($0.3 billion or 7.1%) and aircraft ($0.2 billion or 12.7%) imports.
However, to quote experts at RBC Economics, "today’s report does not alter our view that GDP growth in the quarter is expected to strengthen to 2.8% from the 1.7% recorded in Q2. This would imply a stronger pace than the 1.8% projected by the Bank of Canada in its October forecast.
"However," the bank concludes, "to alter policy, the central bank would need to see evidence of this strength being sustained going forward."
