The surplus shrank to C$3.78 billion ($3.07 billion), the lowest since January, Ottawa-based Statistics Canada said today. The surplus was more than the C$3.3 billion forecast in a Bloomberg survey of 22 economists. The agency lowered its estimate for the September surplus to C$4.25 billion from an initial reading of C$4.49 billion.
Canada’s exports are being hurt by weaker U.S. consumer demand for automobiles and lumber, and falling prices for commodities such as wheat and oil. The Bank of Canada two days ago pared its benchmark interest rate to a 50-year low, saying a global economic contraction is leading Canada into a recession.
Imports rose 4.1 percent to C$39.7 billion, the sixth gain in seven months, led by a 22 percent jump in energy to C$5.68 billion. Every other category except for automobiles also gained, as a record monthly drop in the Canadian dollar made U.S. imports more expensive, Statistics Canada said.
Exports rose 2.5 percent in October to C$43.5 billion, the first gain in three months. That increase was led by a 5.7 percent increase in shipments of machinery and equipment to C$8.3 billion.
Canada’s trade balance with the U.S. narrowed to C$7.33 billion from C$8.23 billion in September. Three-quarters of Canada’s exports are sent to its southern neighbor.