Canada's economy stalled in November, may have contracted in 4th quarter of 2025

Canada's economical ontogeny stalled in nov as ontogenesis in services was ​ countervail by weakness in goods-producing industries, data showed on Friday, offering fresh clues on the state of the economy after almost a year of tariffs and uncertainty.

Gross domestic product was flat month-on-month in November, compared with a 0.3 per cent contraction in October, Statistics Canada said.

Analysts polled by Reuters had forecast ​marginal 0.1 per cent growth in November.

U.S. President Donald Trump's hefty tariffs on steel, automotive, lumber and aluminum have hobbled output in these sectors.

While the tariff malaise ⁠has not spread beyond these sectors, a recent Bank of Canada survey has ‍shown that business sentiment was ⁠subdued, investments were down and companies expected layoffs.

On ​a preliminary basis, Statistics Canada said output in December was expected to slightly grow by 0.1 per cent in December, though the agency cautioned the advance estimate could be revised.

The November performance leaves fourth-quarter growth decelerating by 0.5 per cent annualized, below the Bank of Canada's ⁠most recent forecast of no growth in the final quarter of the year, based on monthly GDP by industry data.

Two consecutive quarters of contraction would constitute a technical recession.

Canada's full-year growth is expected ‍to be at 1.3 per cent in 2025, StatsCan said.

Final reported quarterly GDP numbers are based on income and expenditure and sometimes could differ from the estimate calculated from GDP by industry.

Growth in November was driven mainly by services-producing industries, which account ⁠for roughly three-quarters of economic output.

Retail trade, transportation and warehousing and educational services were the top three sectors that posted ​a positive growth rate in November.

However, in the services sector, wholesale trade posted a decline ​of 2.1 per cent, its largest contraction since April of last year, the statistics agency said.

Most of the strength ‍coming from services was offset by goods-producing industries, which contracted by 0.3 per cent, the third contraction in four months.

Manufacturing output, which contributes more than eight per cent to GDP, posted a ⁠big drop of 1.3 per cent. The industry remains among the most exposed to trade uncertainty, U.S. Tariffs and global trends.

Output of motor vehicles and parts manufacturing shrank by 6.4 per cent, owing largely to a global semiconductor shortage, StatsCan said.

The drop in manufacturing was closely followed by agriculture, forestry, fishing and hunting sub-sector, where growth shrank by 1.1 per cent, the agency said.

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