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Canada merchandise trade deficit narrows as exports rebound

Canada's international merchandise trade deficit narrowed in August, as energy products and aircraft drove a rebound in exports following two months of declines, Statistics Canada reported.

Canada recorded a seasonally adjusted foreign trade deficit of C$955 million in August, down from a revised deficit of C$1.38 billion in July. The consensus estimate of economists polled by Econoday was for a trade gap of C$1.2 billion.

Total exports grew to C$50.58 billion from C$49.66 billion, with gains recorded in eight out of 11 product sections. Exports of energy products rose 3.9% month over month, and exports of aircraft and other transportation equipment and parts climbed 15.5%.

Statistics Canada said crude oil led the increase in exports of energy products amid higher prices. The rise in exports of business jets to the U.S. drove a 38.7% jump in aircraft exports.

Exports of metal and non-metallic mineral products, consumer goods, industrial machinery, equipment and parts, also registered gains. Exports of motor vehicles and parts fell amid extended shutdowns in some assembly plants during the summer.

Total imports went up to C$51.54 billion in August from C$51.05 billion in July. The main contributor to the overall growth were imports of metal and non-metallic mineral products, which rose 9.4%. Canadian firms increased their gold asset acquisitions, lifting gold imports to their highest level in more than two years.

Imports of energy products climbed 9.7%, and imports of metal ores and non-metallic minerals grew 8.8%. Consumer goods imports fell 2.5%.

Canada's trade surplus with the U.S. increased to C$4.94 billion in August from C$4.36 billion in the previous month, as exports rose 3.1% to outpace a 1.8% increase in imports.