"Canadian growth will likely be negative in the second quarter, and net exports will be contributing to that decline"
-Robert Kavcic, Bank of Montreal
Canada ran a near-record trade deficit 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, was the 20th in a row—$2.9 billion compared with March's revised deficit of $3.2 billion. Data was greater than the $2.5 billion shortfall forecast by analysts. The shortfall narrowed from the previous month as exports rose 1.5% from March on a slight recovery in oil prices and increased natural gas shipments to the United States. Volumes rose by 0.5% while prices grew by 1.1%.
Meanwhile, a separate report by Statistics Canada showed that labour productivity rose in the first quarter at its fastest pace in over a year. The labour productivity of Canadian businesses grew by 0.4% in the first quarter of 2016 after recording no growth in the fourth quarter of 2015. Moreover, the increase matched the forecast by market analysts. In addition, data showed that real gross domestic product of businesses grew by 0.6% in the first quarter after a flat fourth quarter, in part because output of goods-producing businesses resumed growth after a decline in the fourth quarter. The number of hours worked increased by 0.2% after remaining virtually unchanged the previous quarter. Overall labour costs per unit of production dropped by 0.3% as productivity growth outstripped the increase in wages.
© Dukascopy Bank SA