Bloomberg News

Canada Records Second-Largest Current Account Deficit on Exports

November 29, 2012

Canada’s current account deficit widened to the second largest on record between July and September as exports of goods fell faster than imports.

The deficit grew to C$18.9 billion ($19.1 billion) in the third quarter from C$18.4 billion in the previous three months, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg forecast a C$19.2 billion deficit according to the median of 16 responses.

The shortfall in Canada’s broadest measure of international trade has widened for four straight quarters, underlining the increasing global strains on the world’s 11th-largest economy where exports account for one-third of output. Tomorrow Canada will probably report that third-quarter gross domestic product slowed to a 0.8 percent annualized pace, according to economists surveyed by Bloomberg News.

The deficit in traded goods widened to C$4.84 billion from C$3.64 billion in the third quarter, Statistics Canada said today.

Exports of goods fell C$3.7 billion to C$112.7 billion and imports fell C$2.5 billion from a record high to C$117.6 billion.

The third-quarter deficit lags only the C$19.4 billion set in the third quarter of 2010, according to Statistics Canada figures.

In a separate report, the agency also said its index of raw-materials prices paid by manufacturers was unchanged in October, while the median estimate in a Bloomberg survey of seven economists was for a 1 percent decrease. Crude oil prices rose 0.5 percent while metal prices declined, the report said.

The industrial product price index, what factories are paid for their goods, fell 0.1 percent in October from September, while economists forecast 0.2 percent decline according to the median estimate in a Bloomberg survey with 11 responses.

Over the 12 months ending in October, industrial prices fell 0.2 percent while raw-materials costs fell 2.8 percent, suggesting factory profit margins widened.

To contact the reporter on this story: Greg Quinn in Ottawa at gquinn1@bloomberg.net

To contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net; Chris Wellisz at cwellisz@bloomberg.net


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