(Adds reaction)
By David Ljunggren
OTTAWA, Jan 6 (Reuters) - Canada's exports grew for the
first time in four months in November, cutting the trade deficit
in a sign the country's weak currency is helping manufacturers
even as the price of oil slides.
Statistics Canada said on Wednesday the deficit narrowed to
C$1.99 billion ($1.41 billion) from C$2.49 billion in October.
Analysts polled by Reuters had forecast a shortfall of C$2.60
billion.
Overall exports grew by 0.4 percent to C$43.25 billion,
pushed up by shipments of motor vehicles and parts, metal ores
and forestry products. Energy exports slumped by 6.6 percent to
hit their lowest since May 2009.
November marked the 15th consecutive monthly trade deficit,
reflecting the continuing economic damage caused by low oil
prices that have helped drag the Canadian dollar down to a
12-year low.
The weak currency, though, can help exporters by making
their products more competitive.
"The main reason we are seeing Canada's trade balance
improve despite the slaughter of commodity prices ... is the
weak Canadian dollar," said Sal Guatieri, a senior economist at
BMO Capital Markets.
Guatieri, speaking by phone, said the struggling economy
should benefit from the weak currency and continued growth in
U.S. demand.
In a sign of continued challenges, imports fell by 0.7
percent in November, with the largest declines in electronic and
electrical equipment and parts and energy products.
Some in the market are speculating that the Bank of Canada
could cut rates at its next announcement on Jan. 20.
Exports to the United States, which accounted for 75.2
percent of Canada's global total in November, rose by 1.3
percent while imports slipped by 0.1 percent.
As a result, Canada's trade surplus with the United States
grew to C$2.11 billion from C$1.68 billion in October.
Export Development Canada chief economist Peter Hall said he
expected energy prices to stay weak but noted stronger
performances by the Canadian forestry and auto sectors on the
back of increased U.S. demand.
"They're capitalizing on the best news story in the entire
world and that is that revival of the American economy," he
said.
The drop in oil prices is one reason why Canada is on track
to post its largest ever annual trade deficit in 2015.
For the first 11 months of the year the shortfall was a
record C$22.84 billion, far ahead of the previous record for the
January-November period of C$12.89 billion in 2012.
($1=$1.41 Canadian)
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Graphic - Canada economic dashboard http://graphics.thomsonreuters.com/15/sc-canada/index.html
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