By David Ljunggren
OTTAWA, June 3 (Reuters) - Canada ran a near-record trade
deficit of C$2.94 billion ($2.28 billion) in April as the
economy continued to struggle with weak crude oil prices that
have slashed the value of exports and curbed growth.
The deficit, announced by Statistics Canada on Friday, was
the 20th in a row and greater than the C$2.45 billion shortfall
forecast by analysts in a Reuters poll. March's revised deficit
of C$3.18 billion is the record.
The shortfall narrowed from the previous month as exports
rose 1.5 percent from March on a slight recovery in oil prices
and increased natural gas shipments to the United States.
Volumes rose by 0.5 percent while prices grew by 1.1 percent.
Imports increased 0.9 percent on the month on aircraft and
other transportation equipment.
"The volume increase in exports was slightly underwhelming
and I think we will be downgrading what we are expecting out of
April gross domestic product," said Nick Exarhos, economist at
CIBC Capital Markets.
Exarhos, speaking by phone, said he had initially been
looking for a 0.3 percent boost in growth in April after the
economy shrank by 0.2 percent in March.
Exports to the United States, which accounted for 74.8
percent of Canada's global total in April, rose 2.3 percent
while imports advanced by 3.0 percent.
As a result, Canada's trade surplus with its neighbor to the
south narrowed to C$1.57 billion from C$1.74 billion in March,
the lowest surplus since December 1993.
The Canadian dollar shrugged off the data and climbed
instead on disappointing U.S. jobs numbers, rising to C$1.2955
to the U.S. dollar, or 77.19 U.S. cents, after opening at
C$1.3096, or 76.34 U.S. cents.
The Bank of Canada - which interest cut rates twice in 2015
to cushion against the oil price slump - last week said recent
indicators suggest the United States would see a return to solid
growth in 2016 despite weakness at the start of the year.
Exports are likely to slump in May, when a major wildfire in
northern Alberta forced several oil sands facilities to
temporarily shut down.
Exarhos said the U.S. Federal Reserve was likely to raise
interest rates at least once this year, which would weaken the
Canadian dollar. Such a move would also, in theory, boost
exports.
Separately, Statscan said labor productivity of Canadian
businesses grew by 0.4 percent in the first quarter of 2016
after recording no growth in the fourth quarter of 2015.
($1=$1.29 Canadian)
(With additional reporting by Fergal Smith in Toronto; Editing
by Alan Crosby)