Rannella Billy-Ochieng’, an economist at the Royal Bank of Canada (RBC), notes that Canada's trade deficit narrowed to $1B in August up from a revised $1.4B deficit in July.
- “The details of today’s report were arguably softer than the headline numbers implied. Non-energy export volumes increased about 1% month-over-month by our count, but driven largely from an increase in exports of aircraft and other transportation equipment which grew by 13.2%. That increase is likely not to be repeated in the coming months.
- After accounting for price effects, energy exports were also down 2.2% in August. Despite the fact that import volumes were up - much of which was driven from gold, a pullback in equipment imports does not bode well for near-term business investment growth.
- The notoriously volatile nature of the data makes us hesitant to put too much emphasis on one month’s reading. But the details of today’s trade report were a bit disappointing.”