Canada’s economy experienced a standstill in November as robust growth in services was counteracted by weaknesses in goods-producing sectors, according to recent data. The country’s Gross Domestic Product (GDP) remained flat month-on-month in November, contrasting with a 0.3% decline in October, as reported by Statistics Canada. Analysts had predicted a slight 0.1% growth for November.
The impact of U.S. President Donald Trump’s tariffs on steel, automotive, lumber, and aluminum industries has significantly hampered output in these areas. Although the tariff issues have not extended beyond these sectors, a Bank of Canada survey indicated subdued business sentiment, reduced investments, and anticipated job cuts.
Initial estimates suggest a modest 0.1% growth in December, though Statistics Canada cautioned that this figure could be subject to revision. The lackluster performance in November indicates a 0.5% deceleration in fourth-quarter growth on an annualized basis, falling below the Bank of Canada’s recent forecast of zero growth in the final quarter of the year.
If the trend persists for two consecutive quarters, it could signify a technical recession. Canada’s annual growth for the year 2025 is projected to reach 1.3%, according to StatsCan. The final reported quarterly GDP figures, determined by income and expenditure data, may differ from the estimates derived from GDP by industry calculations.
The growth in November was primarily led by services-producing industries, which contribute about three-quarters of the country’s economic output. Retail trade, transportation, warehousing, and educational services were the top-performing sectors in terms of growth during the month. However, the services sector saw a 2.1% decline in wholesale trade, marking its most significant contraction since April of the previous year.
On the flip side, goods-producing industries experienced a 0.3% contraction, marking the third decline in the past four months. Manufacturing output, a key contributor to GDP, notably dropped by 1.3%, reflecting its vulnerability to trade uncertainties, U.S. tariffs, and global economic trends. The motor vehicles and parts manufacturing sector witnessed a substantial 6.4% decrease, largely attributed to a global shortage of semiconductors.
Furthermore, the agriculture, forestry, fishing, and hunting sub-sector also experienced a decline of 1.1% in growth during the period, as reported by the agency.
