By Akhil Shah
OTTAWA (MNI) – Canada’s goods trade deficit with the world likely
continued in August, perhaps falling to C$1.2 billion, Statistics Canada
is expected to report Thursday.
Economists surveyed by Market News International, in the median
taken of their predictions, estimated a C$1.2 billion deficit, rising by
nearly doubly from a deficit of C$753 million in July. However,
individual expectations range from a deficit C$500 million to C$1.6
billion.
Since March 2011, Canada has posted goods trade deficits each
month. Also from the same time, lower demand from the United States and
Europe has been accompanied by higher imports encouraged by the strong
Canadian dollar.
A research report released by the Toronto Dominion (TD) bank
expects exports to have increased a modest 0.2% in August. The bank
expects the aerospace and automotive industries to weigh in on the
exports sector. A sharp decline in commodity prices is also expected to
have restricted the rise in August, the report said. Imports on the
other hand are expected to have increased 1.8% after they advanced 0.5%
in July. Considering the respective growths for exports and imports, the
bank expects the goods trade deficit to have widened to C$1.2 billion in
August.
Emanuella Enenajor, an economist at the Canadian Imperial Bank of
Commerce (CIBC), expects the trade deficit to narrow to C$500 million in
August. The economist expects reduction of factory disruptions to boost
exports. She believes the exports will also be helped by rising U.S.
auto factory production and improved vehicle sales.
Douglas Porter, deputy chief economist, at the Bank of Montreal
(BMO), expects the exports to get a “lending hand” from auto assemblies
recovering in August and U.S. manufacturing output increasing 0.4% in
the same month. He expects the trade deficit to widen to C$1.0 billion.
A report release by the Bank of Nova Scotia (BNS) expects demand
for Canadian goods to be hampered by a decline in business and consumer
confidence across the world as August marked one of the sharpest global
equity sell offs since the recession.
Looking ahead, Canadian exports could possibly rise in the coming
months with the CAD loosing most of the momentum it had gained
previously. In addition to the weakening CAD, the improvement of
Canadian exports also rests in the hands of the global economic outlook
as the uncertainties continue to prevail.
** Market News International Washington Bureau: 202-371-2121 **
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