November 2, 2018 11:15 AM, EDT

Canada Posts Trade Deficit With Declining Exports and Imports

Justin Trudeau in ChinaCanadian Prime Minister Justin Trudeau addressing the media in a prior trip to China. (Ng Han Guan/Associated Press)

Canada’s economy continued to show sluggish trade flows in September with both exports and imports recording back-to-back monthly drops. The statistics agency also revised away its previously reported surplus from August.

The nation posted a C$416 million trade deficit in September, down from a revised C$551 million deficit in August as exports slumped less than imports. Exports were down 0.2%, after dropping 1.5% in August, while imports were down 0.4%. Economists predicted a September surplus of C$200 million.

Statistics Canada made a large revision of its August import numbers to account for the late documentation of three icebreakers. The change meant the country ran a deficit that month instead of a previously reported C$526 million surplus.

The trade picture in September is still consistent with what the economy has seen in recent months — an improving trade balance driven largely by fewer purchases of goods from abroad. Canada’s trade deficit was C$2.7 billion in May. In real terms, which strip out price changes, imports fell 1.5% in September and exports were down 1.2%.

For all of the third quarter, exports were up 2.6% versus a 6% gain in the second quarter. The increase was all price gains, with export volumes down 0.3% in the three-month period.

Third-quarter imports were down 0.1%, with volumes falling 1.2%.