Posts Tagged "grew"

The gap between what Canada sells to the rest of the world and what it buys from it got narrower in January, down from the all-time record deficit it hit at the end of 2018.

Statistics Canada reported Wednesday that Canada’s international trade deficit narrowed to $4.2 billion in January, mainly because of higher Canadian oil exports. The data agency originally reported that Canada’s trade deficit hit an all time record of $4.6 billion in December, and on Wednesday Statscan revised that figure even higher — it was actually $4.8 billion, based on the new data.

But the figure seems to have come down since then.

Canada imported 1.5 per cent more during the month of January, but exports grew by almost twice that much, which is why the overall gap got smaller.

After five straight monthly declines, Canadian energy exports rose by 14 per cent during the month to $7.1 billion. A lot of that was oil, as prices rebounded by more than a third from a big decline seen at the end of 2018.

While Canada has a trade deficit with the world as a whole, the country continues to have a trade surplus with its largest trading partner, the United States. Exports rose to just over $34 billion while imports increased to $32.5 billion, giving Canada a $1.6 billion trade surplus to the U.S.

With the rest of the world, meanwhile, Canada posted a trade deficit of $5.8 billion, down from $6.6 billion in December.

In January, Canada sold:

  • 52 per cent more to the UK.
  • 37 per cent more to Italy.
  • 28 per cent more to the Netherlands.
  • 17 per cent more to Mexico.
  • 17 per cent less to China.
  • 18 per cent less to South Korea.

Despite the yawning trade deficit overall, TD Bank economist Omar Abdelrahman was heartened by some of the details of the report.

“The rebound in exports (the first since July), and specifically in energy prices, which weighed heavily on trade in the last few months, is encouraging,” he said after the numbers came out.

He thinks a weak loonie should help boost Canadian exports even further in the coming months, but a worsening outlook for the global economy could hold that back a little. “This wasn’t a great start to 2019, but it could have been worse,” he said.


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Statistics Canada says the amount Canadians owe relative to their income ticked higher in the fourth quarter of last year as the growth in debt slightly outpaced income growth.

The agency says that seasonally adjusted household credit market debt, as a proportion of disposable income, increased to 178.5 per cent in the fourth quarter. That compared with a revised reading of 178.3 per cent in the third quarter.

That means there was roughly $1.79 in credit market debt for every dollar of household disposable income.

Credit market debt, which includes consumer credit and mortgage and non-mortgage loans, totalled nearly $2.21 trillion in the fourth quarter.

Mortgage debt reached nearly $1.44 trillion, while consumer credit and non-mortgage loans combined to total $769.4 billion.

The household debt service ratio, the total obligated payments of principal and interest on credit market debt as a proportion of household disposable income, increased to 14.9 per cent in the quarter compared with revised reading of 14.7 per cent in the third quarter.


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Strength in the manufacturing sector helped the Canadian economy grow more than expected in July and boost expectations the Bank of Canada will raise its key interest rate next month.

Statistics Canada said Friday real gross domestic product grew by 0.2 per cent in July, an increase that followed essentially no change in June.

Economists had expected an increase of 0.1 per cent for July, according to Thomson Reuters Eikon.

Stephen Brown, senior Canada economist at Capital Economics, said the overall economy is on track for annualized growth of around two per cent in the second quarter.

“That would be stronger than the 1.5 per cent expected by the Bank of Canada in its July monetary policy report and is another reason to expect the bank to raise interest rates next month,” Brown wrote in a report.

Statistics Canada numbers show that after remaining flat in June, Canada’s economy grew 0.2% in July 2018. (Canadian Press)

Growing price pressures

The stronger-than-expected GDP figure follows signs of growing price pressures that have also raised expectations of higher interest rates. The annual inflation rate was 2.8 per cent in August, down from 3.0 per cent in July, but still at the top end of the Bank of Canada’s target range of one to three per cent.

The central bank kept its key interest rate target on hold at its rate announcement earlier this month, but most economists expect the central bank to raise the rate at its announcement on Oct. 24.

The Bank of Canada’s trend-setting interest rate sits at 1.5 per cent after four increases since the middle of last year.

The ducks are in a row for an October rate hike, barring a shock on the NAFTA front.– Doug Porter, Bank of Montreal chief economist

“On balance, the Canadian economy looks to have had a wee bit more underlying momentum than expected through the summer, and the ding from the Syncrude outage was not as deep as feared,” Bank of Montreal chief economist Doug Porter said.

“As we opined in the wake of last week’s solid core CPI (2.1 per cent on average), the ducks are in a row for an October rate hike, barring a shock on the NAFTA front.”

Economist Derek Holt with Scotiabank said he also expects a rate hike, referencing remarks made Thursday by Bank of Canada head Stephen Poloz.

“I think this reinforces Governor Poloz’s generally upbeat tone last evening and keeps us on track for an October hike,” said Holt. 

TD senior economist Brian DePratto described the GDP numbers as, “not too shabby.”

“Economic growth may be set to moderate after the second quarter’s impressive performance, but we still look set for another above-trend quarter. “

Trade talks could hurt Canada

The Bank of Canada has said it is closely watching the NAFTA talks and other trade policy developments, which could hurt the Canadian economy.

Bank governor Stephen Poloz has said uncertainty over NAFTA has resulted in less business investment in Canada than there otherwise should be.

A welder fabricates a steel structure at an iron works facility in Ottawa March 5. Manufacturing sales increased 0.9 per cent in July to $58.6 billion, boosted by the transportation equipment and chemical industries, Statistics Canada says. The increase followed essentially no change in the country’s GDP in June. (Sean Kilpatrick/Canadian Press CANADIAN PRESS)

In its report Friday, Statistics Canada said goods-producing industries grew 0.3 per cent, while services-producing industries increased 0.2 per cent.

The agency said 12 of 20 sectors gained ground as the manufacturing sector grew 1.2 per cent in the month, its strongest showing since November 2017.

Wholesale trade grew 1.4 per cent, while transportation and warehousing services grew 0.9 per cent.

Meanwhile, the construction sector fell for the third time in four months as it moved down 0.6 per cent in the month.

With files from CBC News.


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