(Adds analysts' reaction, background)
By David Ljunggren
OTTAWA, Aug 5 (Reuters) - Canada's long-suffering export
sector snapped a five-month losing streak in June, showing the
strongest surge in more than eight years and cutting the
country's trade deficit significantly, Statistics Canada said on
Wednesday.
The trade shortfall for the month was C$476 million ($361
million), much less than the C$2.80 billion deficit forecast by
analysts and far below the C$3.37 billion seen in May.
Exports jumped by 6.3 percent, the biggest month-on-month
gain since a 6.9 percent bounce in December 2006. Shipments of
consumer goods, which leaped by a record 17.2 percent, led the
increase.
Those numbers will be of particular interest to the Bank of
Canada, which cited disappointing non-energy exports as one
reason it cut interest rates for a second time this year in
July. ID:nL2N0ZV11H
"Canada has likely skidded through the soft patch and is
ready for a comeback over the next two quarters ... the
non-energy sector is likely to continue to benefit from an
improving U.S. economy and low Canadian dollar," said Diana
Petramala of TD Economics.
Exports to the United States, which accounted for 76.7
percent of Canada's global total in June, jumped by 7.1 percent,
while imports dropped 0.9 percent. As a result, Canada's
trade surplus with the United States rose to C$4.69 billion from
C$2.15 billion in May.
Despite the stronger export performance, Canada's trade
shortfall in June was its ninth in a row, and the overall
deficit year to date hit a record C$13.82 billion.
That is much bigger than the previous January-to-June record
deficit of C$4.43 billion in 2012. Overall June imports dropped
by 0.6 percent on weaker shipments of aircraft and other
transportation equipment.
The Canadian dollar firmed to a session high of C$1.3142 to
the U.S. dollar, or 76.09 U.S. cents, from a Tuesday close of
C$1.3180 to the greenback, or 75.87 U.S. cents.
Export Development Canada chief economist Peter Hall,
expressing what he called cautious optimism, said he had no
reason to think any particular one-off factor had temporarily
boosted exports in June.
"This gets the second half of the year off to a fantastic
start ... it is the rebound that we had expected," he said in an
interview, citing a healthy 4.8 percent rise in export volumes.
Export prices were up by 1.5 percent.
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Graphic on Canada's trade balance
http://link.reuters.com/xez52w
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($1=$1.32 Canadian)