OTTAWA -- Statistics Canada says the country's trade deficit narrowed to $1.7 billion in September, giving rise to expectations that the economy may start to see the benefits of the weakened loonie.

The result compared with a revised deficit of $2.7 billion in August that was first reported to be $2.5 billion.

Bank of Montreal senior economist Benjamin Reitzes said trade is going to add significantly to growth in the third quarter.

"It appears that we may be seeing the positive impact from the weaker Canadian dollar and firming U.S. domestic demand," Reitzes said.

"And, while Q3 was encouraging, there's still plenty of room for trade to strengthen in the quarters ahead with non-energy export volumes still below year-ago levels."

The result for September came in ahead of the $1.9-billion deficit that had been expected by economists, according to Thomson Reuters.

However, the details of the report included some weakness.

CIBC economist Royce Mendes said exports related to the manufacturing industry struggled in September.

Exports of motor vehicles and parts fell 3.7 per cent to $7.5 billion, while aircraft and other transportation equipment and parts fell 1.7 per cent to $2 billion.

"While exports of those products have made solid gains over the past year, it seems that September wasn't a good month for Canadian manufacturing exports," Mendes said.

"That highlights some of the challenges the sector will face with a weakening global backdrop as it tries to fill the void left in the Canadian economy by the oil price shock."

The Canadian economy has struggled this year due in large part to the drop in oil prices, prompting the Bank of Canada to cut its key interest rate twice. It now sits at 0.5 per cent.

The central bank has been looking an improvement in Canadian exports to help drive an economy that has been hurt by lower commodity prices.

The drop in the overall trade deficit came as imports slipped 1.3 per cent in September to $46.2 billion due to a decrease in metal and non-metallic mineral products.

Meanwhile, exports increased 0.7 per cent to $44.5 billion on higher exports of consumer goods, energy products and metal and non-metallic mineral products.

Import volumes fell 2.1 per cent while prices increased 0.8 per cent. Export volumes gained 0.7 per cent, while prices were unchanged.

Regionally, Canada's trade surplus with the United States edged up to $3.17 billion in September from $3.15 billion in August as imports fell 0.4 per cent and exports declined 0.3 per cent.

Canada's trade deficit with countries other than the United States was $4.9 billion in September compared with $5.8 billion in August.