OTTAWA -- For the third time in the last four months, Canada's merchandise exports rose in September -- this time by $1.0 billion to $30.3 billion as volumes increased 4.5 percent.

According to Stats Canada, total exports increased by 3.5 percent, while there was little change in imports. As a result, Canada's trade deficit with the world narrowed to $927 million from $2.0 billion in August.

Automotive products, industrial goods and materials, and machinery and equipment were the main sources of growth for exports. Energy products mitigated the gains.

In September, imports edged down 0.1 percent to $31.2 billion, as volumes fell 0.8 percent. However, declines in imports in both August and September did not offset the strong gain in July 2009.

Exports to the United States increased 0.5 percent while imports grew 1.7 percent. But exports to other countries increased by a significant 12.4 percent and accounted for 88 percent of the increase in overall exports.

Higher exports to the European Union were largely responsible for the increase in exports. Consequently, Canada's trade deficit with countries other than the United States narrowed to $3.0 billion in September from $4.3 billion in August. 

Exports of automotive products increased 15.8 percent to $4.2 billion, as volumes rose 17.4 percent.

Exports of passenger autos, up 18.4 percent, led the gain as new models were introduced, and some manufacturers resumed production after summer shutdowns.

Exports of motor vehicle parts grew 8.6 percent, reflecting increased vehicle production in the U.S. in an effort to replenish inventories, which were depleted during the summer "cash for clunker" sales.

Meanwhile, exports of industrial goods and materials grew 6.3 percent to $6.6 billion, largely the result of higher exports of metals and alloys.

Machinery and equipment exports were up 4.5 percent to $6.4 billion due to rising volumes. Aircraft and other transportation equipment (+8.6%), and industrial and agricultural machinery (+7.4%), were largely responsible for the gain in this sector.