OTTAWA – Statistics Canada says a dip in imports contributed to a significant narrowing of Canada’s merchandise trade deficit in January to $177 million from $922 million the previous month.
The agency says exports did increase during the month by 0.2 per cent to $40.6 billion, but it was a 1.6 per cent decline in imports to $40.8 billion that was the main reason for the improvement in the balance of trade.
In volume terms, exports fell 5.3 per cent, which is expected to weigh on the country’s economic output during the first quarter of 2014. Exports were up slightly in value because prices obtained by shippers rose by 5.8 per cent, the agency said.
The strongest export contributors came in energy products, up 9.2 per cent, although most of that gain was due to price effects.
As well, there were sizable percentage gains in shipments of farm, fishing and intermediate food products, as well as wheat.
Meanwhile, exports in motor vehicles fell by 11 per cent, which the agency partly attributed to the extension of holiday shutdowns both in Canada and the U.S.
Overall, exports to the United States, Canada’s largest customer, edged lower by 0.1 per cent to $30.7 billion, while imports from south of the border declined an even larger 1.8 per cent to $27.1 billion. As a result, Canada’s trade surplus with its nearest neighbour expanded to $3.6 billion from $3.2 billion in December.
Canada’s trade deficit with the rest of the world narrowed by about $300 million to $3.8 billion in January, as exports grew by 1.3 per cent and imports declined by 1.2 per cent.
In a separate report, Statistics Canada said labour productivity rose by one per cent in the fourth quarter of 2013, following a smaller 0.3 per cent gain in the third. The real gross domestic product of business grew a healthy 0.7 per cent, while hours worked in goods-producing firms dipped by 0.2 per cent.