OTTAWA (Reuters) – Canada’s recorded a bigger than expected trade surplus of C$2.97 billion ($2.19 billion) in October, as imports declined and exports edged up, Statistics Canada said on Wednesday.
Analysts in a Reuters poll had forecast a C$1.60 billion surplus. September’s surplus was downwardly revised to C$1.1 billion from C$2.04 billion initially reported.
Total exports increased 0.1% while imports were down 2.8%.
The decline in imports was led by metal and non-metallic mineral products and motor vehicles and parts. By volume, total imports were down 3.2%.
The motor vehicles and parts category recorded its first monthly decline since March, with imports of passenger cars and light trucks being the largest drag.
“In the context of unstable supply due to strikes by U.S. auto workers in October, a large share of the monthly decline was attributable to lower imports from the United States,” Statscan said.
Aircraft and other transportation equipment and parts rose drove the gains in exports, which registered a fourth consecutive monthly rise.
The largest contributor to the aircraft and other transportation equipment and parts category was exports of other transportation equipment to Saudi Arabia, Statscan noted. The shipments to Saudi Arabia also helped increase exports to countries other than the United States – Canada’s biggest trading partner.
While the value of exports increased, by volume they were down 0.1%.
Canada’s gross domestic product unexpectedly contracted in the quarter and the Bank of Canada anticipates growth to remain muted until end-2024 as high interest rates weigh on the economy.
The central bank has left its key policy rate at a 22-year high of 5% since July and analysts predict that the bank will stay on hold at its next rate announcement at 10 a.m. (1500 GMT) on Wednesday.
($1 = 1.3566 Canadian dollars)
(Reporting by Ismail Shakil in Ottawa; Editing by Dale Smith)
