Canada posted a trade deficit of $1.09-billion in November, thanks in part to a major railway strike that slowed the shipment of imports and exports, Statistics Canada said on Tuesday.
Analysts polled by Reuters had forecast a shortfall of $1.15-billion. Statscan revised the October deficit to $1.61-billion from an initial $1.08-billion.
The figures are the latest in a string of unimpressive recent data that analysts say are likely to point to fourth-quarter annualized economic growth coming in below the 1.3 per cent that the Bank of Canada had forecast in October.
The value of goods exports fell 1.4 per cent in November, with seven of the 11 product categories posting declines, while imports fell by 2.4 per cent to $49.78-billion. In volume terms, exports declined by 2.7 per cent from October while imports dropped by 1.3 per cent.
Some 3,200 conductors and yard workers at Canadian National Railway Co. – the country’s biggest rail firm – walked off the job for eight days in November, the biggest rail strike in a decade.
Energy exports declined 7.4 per cent on lower shipments of crude oil, the agency said, because of pipeline disruptions after a rupture in late October.
“Given that these factors [the rail strike and the pipeline disruption] were resolved by the end of the month, we suspect that both exports and imports rebounded sharply in December,” said Stephen Brown, a senior economist at Capital Economics.
Canada relies on rail firms to move products such as crops, oil, potash, coal and other manufactured goods to ports and the United States. Industry figures show about half of Canada’s exports move by rail.
Peter Hall, chief economist at Export Development Canada, said the dip in exports was also tied to global trade worries stemming from a dispute between China and the United States.
“As long as this investment hesitation we’re seeing around the world … persists, we’re going see weakness inside of these numbers,” he said in a phone interview.
The Bank of Canada has held its overnight interest rate steady for more than a year even as several of its counterparts, including the U.S. Federal Reserve, have eased rates.
The central bank is set to release updated forecasts on Jan. 22, which is also the date of its next fixed-rate announcement. Market expectations, as reflected in the overnight index swaps markets, show operators expect it to stay put.