Canada’s economic growth came to a standstill in November as the services sector’s expansion was counteracted by a decline in goods-producing industries, 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 minimal growth of 0.1% for November.
The implementation of heavy tariffs by U.S. President Donald Trump on steel, automotive, lumber, and aluminum has significantly impacted output in these specific sectors. Although the negative effects have been predominantly limited to these areas, a recent survey by the Bank of Canada indicated subdued business sentiment, reduced investments, and anticipated layoffs.
Preliminary estimates suggest a slight 0.1% growth in December, but Statistics Canada has cautioned that this figure may be subject to revision. The lackluster performance in November is expected to lead to a deceleration of fourth-quarter growth by 0.5% annualized, falling below the Bank of Canada’s recent forecast of zero growth in the final quarter of the year.
If the slowdown persists for two consecutive quarters, it could signify a technical recession. Canada’s full-year growth for 2025 is projected to reach 1.3%, according to StatsCan. Final quarterly GDP figures, determined by income and expenditure, may sometimes differ from the estimates derived from GDP by industry data.
In November, growth was primarily driven by the services sector, which contributes around three-quarters of the country’s economic output. Retail trade, transportation, warehousing, and educational services were among the top sectors showing positive growth rates. However, wholesale trade within the services sector experienced a notable decline of 2.1%, marking its most significant contraction since April of the previous year.
On the other hand, goods-producing industries contracted by 0.3%, with manufacturing output witnessing a substantial decrease of 1.3%. The manufacturing industry, which holds over 8% of the GDP, faced challenges due to trade uncertainties, U.S. tariffs, and global economic trends. Notably, the output of motor vehicles and parts manufacturing dropped by 6.4% primarily due to a global semiconductor shortage. Additionally, the agriculture, forestry, fishing, and hunting sub-sector saw a 1.1% decline in growth during the same period.
