Canada’s economic expansion came to a halt in November as services growth was counteracted by weaknesses in goods-producing sectors, according to data released on Friday. The Statistics Canada report indicated that the country’s gross domestic product remained unchanged on a monthly basis in November, following a 0.3 percent decline in October. Analysts surveyed by Reuters had predicted modest 0.1 percent growth for the month.
The impact of heavy tariffs imposed by U.S. President Donald Trump on steel, automotive, lumber, and aluminum industries has significantly dampened output in these key sectors. While the effects of tariffs have been contained within these areas, a recent survey by the Bank of Canada revealed subdued business sentiment, reduced investments, and anticipated job cuts.
Preliminary estimates from Statistics Canada suggest a slight 0.1 percent growth in output for December, although the agency cautioned that this forecast could be subject to revisions. The performance in November is expected to result in a 0.5 percent annualized deceleration in fourth-quarter growth, falling below the Bank of Canada’s previous forecast of zero growth in the final quarter of the year, based on monthly GDP data by industry.
If two consecutive quarters experience contraction, it would meet the technical definition of a recession. Statistics Canada projects Canada’s full-year growth for 2025 to be around 1.3 percent. Final quarterly GDP figures, based on income and expenditure data, may occasionally vary from estimates derived from GDP data by industry.
The growth in November was primarily led by services-producing sectors, which contribute approximately three-quarters of the country’s economic output. Retail trade, transportation and warehousing, and educational services were among the top three sectors that exhibited positive growth rates in November. However, wholesale trade within the services sector recorded a notable decline of 2.1 percent, marking its most substantial contraction since April of the previous year.
The positive momentum from services was offset by a contraction of 0.3 percent in goods-producing industries, marking the third decline in the past four months. Manufacturing, a sector that contributes over eight percent to GDP, experienced a significant drop of 1.3 percent, largely due to trade uncertainties, U.S. tariffs, and global economic trends. The output of motor vehicles and parts manufacturing notably decreased by 6.4 percent, primarily attributed to a global semiconductor shortage.
Following the decline in manufacturing, the agriculture, forestry, fishing, and hunting sub-sector also experienced a contraction of 1.1 percent, as reported by the agency.
