Im­ports and ex­ports hit record highs in lat­est sign of strength­en­ing econ­omy

The Hamilton Spectator - - BUSINESS - CRAIG WONG

OT­TAWA — Canada’s im­ports and ex­ports both reached record highs in May, the lat­est sign of strength in the econ­omy ahead of ex­pec­ta­tions that the cen­tral bank may be days away from rais­ing its in­ter­est rate tar­get.

The trade deficit dou­bled to $1.1 bil­lion in May from a $552-mil­lion deficit the month be­fore, though that was fu­elled by the im­port of five new air­lin­ers, Statis­tics Canada said Thurs­day. Econ­o­mists had ex­pected a deficit for May of $530 mil­lion, ac­cord­ing to Thom­son Reuters.

“There is a lot of noise to fil­ter through in to­day’s trade re­port but we think the mes­sage on ex­ports is ul­ti­mately pos­i­tive,” Royal Bank econ­o­mist Josh Nye wrote in a re­port.

Im­ports rose 2.4 per cent to $49.8 bil­lion in May, led by a 45.9 per cent in­crease in the air­craft and other trans­porta­tion equip­ment and parts cat­e­gory due to the new air­lin­ers. Ex­ports climbed 1.3 per cent to $48.7 bil­lion, buoyed by ship­ments of un­wrought gold to the United King­dom.

Ex­ports of en­ergy prod­ucts in­clud­ing crude oil fell 9.0 per cent to $8.0 bil­lion as both prices and vol­umes de­clined. Ex­clud­ing en­ergy prod­ucts, ex­ports rose 3.6 per cent.

Nye called it a “solid in­crease” in non-en­ergy ex­ports for May and noted that they are now up rel­a­tive to a year ago.

“A price-re­lated de­cline in oil ex­ports be­lies what has been a fairly strong in­crease in en­ergy ex­port vol­umes year-to-date,” Nye said.

“That sup­ports the Bank of Canada’s view that ad­just­ment to lower oil prices is now largely com­plete.”

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