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InvestmentsCanada's exports drop as supply chain woes drag auto sector By Reuters

Canada’s exports drop as supply chain woes drag auto sector By Reuters


© Reuters. FILE PHOTO: A truck strikes previous stacked transport containers on the Port of Montreal in Montreal, Quebec, Canada, May 17, 2021. REUTERS/Christinne Muschi/File Photo

By Julie Gordon

OTTAWA (Reuters) -Canada’s exports fell in September as a semi-conductor chip scarcity weighed on motorcar and elements manufacturing, although that decline was partially offset by report excessive exports, Statistics Canada knowledge confirmed on Thursday.

Imports have been down 3.0%, additionally hit exhausting by the worsening supply chain points for motorcar and elements. Canada’s commerce surplus with the world, in the meantime, rose to C$1.86 billion ($1.50 billion), beating expectations of C$1.55 billion.

“The real message here is not demand, demand is very strong. The real issue here is supply chains, and now they’re starting to bite on overall trade activity really hard,” mentioned Peter Hall, chief economist at Export Development Canada.

Hall added that these points have been more likely to proceed weighing on Canada’s producers, significantly the auto sector, for months to come back.

“This is just creating chaos,” he mentioned. “The best indication that we got (of when) things would actually start to settle down is mid of next year. That’s a long way away.”

Exports of motor autos and elements fell 17.9% in September from August, whereas exports of vitality merchandise rose 6.1%, buoyed by excessive crude costs. Imports of motor autos and elements have been down 13.6% on the month.

While the decline in imports is technically optimistic for financial development, economists famous that the two-way commerce droop reveals the direness of the supply chain bottlenecks.

“The slump in trade in both directions is a concern as it demonstrates just how big an impact that supply constraints are having, particularly on the motor vehicle sector,” mentioned Paul Ashworth, chief North America economist for Capital Economics.

Capital Economics expects third-quarter annualized GDP development of little greater than 2%, nicely under the Bank of Canada’s 5.5% projection.

The Canadian greenback was buying and selling 0.3% decrease at 1.2425 to the buck, or 80.48 U.S. cents as the U.S. greenback rallied towards a basket of main currencies.

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