Canada’s economic expansion came to a halt in November, with growth in services offset by a decline in goods-producing sectors, according to recent data. The country’s gross domestic product remained unchanged month-on-month in November, following a 0.3% contraction in October, as reported by Statistics Canada. Analysts had predicted a marginal 0.1% growth for November, which did not materialize.
The impact of U.S. President Donald Trump’s tariffs on steel, automotive, lumber, and aluminum was evident as these industries experienced reduced output. While the effects of the tariffs were primarily confined to these sectors, a Bank of Canada survey revealed subdued business sentiment, decreased investments, and anticipated job cuts.
Preliminary estimates suggest a slight 0.1% growth in output for December, although Statistics Canada cautioned that this figure is subject to revision. The lackluster performance in November led to a deceleration of fourth-quarter growth by 0.5% annualized, falling below the Bank of Canada’s previous forecast of no growth in the final quarter, based on monthly GDP data by industry. A technical recession, defined by two consecutive quarters of contraction, could be looming.
Canada’s full-year growth for 2025 is projected to reach 1.3%, according to StatsCan. However, final reported quarterly GDP figures, based on income and expenditure, may vary from estimates derived from GDP by industry data.
The growth in November was primarily driven by services-producing industries, comprising about three-quarters of the country’s economic output. Retail trade, transportation and warehousing, and educational services were the top performers in terms of growth. On the other hand, the goods-producing sectors saw a decline of 0.3%, marking the third contraction in four months.
Manufacturing, a significant contributor to GDP, experienced a notable decline of 1.3%, with motor vehicles and parts manufacturing leading the downturn by 6.4% due to a global semiconductor shortage. Agriculture, forestry, fishing, and hunting also saw a decline of 1.1% during the same period.
Overall, the data reflects a mixed economic landscape for Canada, with challenges in the manufacturing and goods-producing sectors offsetting growth in services industries.