Canada’s economy saw no growth in November as an upturn in services was counterbalanced by a downturn in goods-producing sectors, according to recent data. The country’s Gross Domestic Product (GDP) remained unchanged in November, following 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 has hindered production in these areas. While the repercussions have been contained within these sectors, a Bank of Canada survey revealed subdued business sentiment, decreased investments, and anticipated job cuts.
Preliminary figures from Statistics Canada suggest a marginal 0.1% growth in December, but the agency cautioned that these estimates might be subject to revisions. The lackluster performance in November is projected to result in a 0.5% deceleration in fourth-quarter growth on an annualized basis, falling short of the Bank of Canada’s previous forecast of zero growth for the final quarter.
If economic activity contracts for two consecutive quarters, it could signal a technical recession. Canada’s annual growth for the year is anticipated to reach 1.3% in 2025, according to StatsCan. The final GDP numbers for the quarter are determined based on income and expenditure and could sometimes deviate from the estimates derived from GDP by industry data.
The growth in November was primarily fueled by services-producing industries, accounting for approximately 75% of the economic output. Retail trade, transportation, warehousing, and educational services were the top performers in November. However, wholesale trade within the services sector experienced a significant decline of 2.1%, marking its largest contraction since April of the previous year.
On the other hand, goods-producing industries saw a 0.3% contraction, with manufacturing, a crucial contributor to GDP, witnessing a notable 1.3% decline. The manufacturing sector, heavily influenced by trade uncertainties, U.S. tariffs, and global dynamics, faced challenges. Motor vehicles and parts manufacturing output decreased by 6.4% due to a global semiconductor shortage. Additionally, agriculture, forestry, fishing, and hunting activities experienced a 1.1% decline during the period.