(Adds reaction, details, Canadian dollar edging up)
By David Ljunggren
OTTAWA Dec 6 Canada's trade deficit in October
shrank to C$1.13 billion ($0.85 billion) from a record C$4.38
billion in September as one-off factors helped slash the value
of imports, Statistics Canada data indicated on Tuesday.
The deficit - the 26th in a row - was smaller than the
C$2.00 billion shortfall forecast by analysts in a Reuters poll.
The long-suffering export sector - which the Bank of Canada
says is a cause for concern - turned in a sluggish performance
despite a low Canadian dollar and a strengthening U.S. economy.
Imports fell by 6.3 percent to C$44.71 billion, the lowest
level since February 2015. Imports of industrial machinery sank
by 42.0 percent from September, when a South Korean module
destined for an offshore oil rig arrived in Canada.
Imports of energy products dropped by 11.6 percent in
October, which coincided with scheduled maintenance at
refineries in eastern Canada.
Exports edged up 0.5 percent to C$43.58 billion, despite
declines in seven of the 11 main sections, while volumes dipped
by 0.7 percent.
The Bank of Canada said last month that structural export
capacity and competitiveness challenges had been more persistent
and pronounced than the bank expected.
The sector showed signs of strength in the third quarter as
the economy bounced back from a devastating Alberta wildfire in
May but now looks to be in slow gear again.
"That plays to the concern that the third quarter export
surge was transitory and ... we are back in terms of renewed
export frustrations," said Derek Holt, vice president and head
of capital markets economics at Scotiabank.
The Canadian dollar strengthened slightly, edging up to
C$1,3265 to the U.S. dollar, or 75.39 U.S. cents, up from C$
1.3278, or 75.31 U.S. cents before the release.
Energy exports increased by 5.5 percent, helping offset
lower shipments of consumer goods and aircraft and other
Exports to the United States, which accounted for 75.2
percent of all Canadian exports in October, grew by 1.6 percent
while imports slipped by 0.1 percent. As a result, Canada's
trade surplus with the United States grew to C$3.02 billion from
C$2.47 billion in September.
"It's a mixed bag. I think there are good news stories
inside what is a tepid number," said Peter Hall, chief economist
at Export Development Canada, pointing to increased exports of
autos and forestry products.
(With additional reporting by Fergal Smith in Toronto; Editing
by Frances Kerry and Bill Trott)