Current account balance still in the red: Statscan

The country’s current account deficit grew by $2.6 billion in the second quarter to a total of $11 billion, Statistics Canada said Monday.

OTTAWA — The country’s current account deficit grew by $2.6 billion in the second quarter to a total of $11 billion, Statistics Canada said Monday.

The agency said export growth slowed and imports grew, while a lower deficit in investment income flows was partially offset by a higher deficit in international trade in services. It was the seventh consecutive quarter of deficit in the current account, which covers transactions in goods, services, investment income and current transfers.

The balance on trade in goods fell $2.5 billion in the second quarter to return to a deficit, following two quarters of surpluses. The goods surplus with the United States shrank by $2.3 billion, following two quarters of gains. Overall, exports of goods rose by $1.2 billion, substantially less than in the previous quarter. Energy products and industrial goods were the main contributors to the recovery in goods exported in the previous three quarters, but they both declined in the second quarter of 2010.

Exports of energy products fell $1.9 billion in the second quarter, with prices down for all components except coal.

Following a gain of $5 billion over the three previous quarters, exports of industrial goods edged down $300 million on lower volumes. Exports of automotive products continued to gain ground, up $1.9 billion, with automobiles surpassing the $10-billion mark for the first time since the second quarter of 2007.

Machinery and equipment exports rose $1.2 billion, as volumes increased after six quarters of declines and prices rose for the first time in five quarters.

The deficit on trade in services expanded by $300 million in the second quarter, led by travel and travel related components. The travel deficit reached a high of $3.5 billion, up $500 million from the previous quarter. Meanwhile, foreign investors continue to acquire significant amounts of Canadian securities.