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Containers are stacked at the Port of Montreal, on March 1, 2019.

Ryan Remiorz/The Canadian Press

Canada’s trade deficit shrank slightly to $4.25-billion in January, the second biggest total on record, as low crude prices continued to eat into the value of exports, Statistics Canada said on Wednesday.

Analysts in a Reuters poll had predicted a shortfall of $3.50-billion. Statscan revised December’s deficit to $4.82-billion from an initial $4.59-billion.

Exports grew 2.9 per cent to $47.58-billion – the first increase since July, 2018 – as the value of oil shipments jumped by 36.5 per cent because of higher prices. Even so, crude export prices remained 40.1 per cent below their July peak.

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Export Development Canada chief economist, Peter Hall, said he was “still looking at the overall picture with some concern.”

He noted, though, that exports of industrial machinery, equipment and parts climbed 4.7 per cent on the month while shipments of electronic and electrical equipment and parts were up by 1.9 per cent.

“To me, they are a bellwether of underlying strength in the U.S. economy,” Mr. Hall said in a telephone interview.

Exports of other crop products sank 25.4 per cent, as soybean shipments to China slipped after a record year in 2018.

Imports gained 1.5 per cent to a record $51.82-billion, as imports of aircraft soared six-fold from December, reflecting the arrival of airliners from the United States.

The Canadian dollar extended its decline on the news, slipping to $1.3427 to the U.S. dollar, or 74.48 US cents.

Canada sent 71.5 per cent of all its goods exports to the United States in January. Exports to the United States rose by 1.1 per cent while imports edged up by 1.8 per cent and, as a result, the bilateral trade surplus shrank to $1.56-billion from $1.77-billion in December.

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The Bank of Canada, which has put interest rate hikes on hold until data show the economy recovering from a slump caused in part by low oil prices, is widely expected to sit on the sidelines at its next policy announcement on April 24.

“Over the first quarter as a whole, net trade is on track to weigh on GDP growth for the first time in a year,” said Stephen Brown, senior Canada economist at Capital Economics.

Publication of the January data was delayed from March 7 because of a partial U.S. government shutdown.

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