Canada's economy experienced a complete halt in expansion in November 2025, with Gross Domestic Product (GDP) reporting zero per cent growth, according to the latest figures released by Statistics Canada. This follows a downward revision for October, which saw the economy contract by 0.3%.
Services sectors provided the necessary counterbalance to ongoing weakness in the goods-producing industries, which saw significant contraction. The manufacturing sector overall fell by 1.3%, driven heavily by a 1.9% decline in durable goods production, encompassing machinery, metal products, and transportation equipment.
Trade policy uncertainty, particularly stemming from tariff threats by the US administration, appears to be weighing heavily on Canadian producers. The durable goods sector has retreated to levels last seen in mid-2011, excluding the initial pandemic disruption in 2020, reports Statistics Canada.
Andrew DiCapua, principal economist for the Canadian Chamber of Commerce, noted that the November data suggests weakness accelerated in the manufacturing segment due to trade friction with little indication of a December rebound. This uncertainty is reportedly causing Canadian firms to adopt a cautious stance regarding major capital expenditure and hiring initiatives.
Conversely, the services component showed resilience, with retail trade expanding by 1.3% after two preceding months of decline. Significant boosts came from specific subsectors recovering from prior labour disruptions, including a 2.5% rise in food and beverage retailers following provincial labour action resolution.
Furthermore, educational services saw a one per cent increase, largely attributed to the return of classes in Alberta following the conclusion of a teachers’ strike in late October. Transportation and warehousing also climbed 0.9%, boosted significantly by a 41.7% surge in postal services after job action suspension late in November.
Derek Holt, head of capital markets economics at the Bank of Nova Scotia, characterized the year-end economic performance as a 'convoluted mess' of macro factors, weather, and industrial disputes. Despite the weak finish, the Bank of Canada maintained its key policy rate at 2.25% this week, anticipating only modest growth through 2026.
The final data point for the year, the December 2025 GDP report, is scheduled for release in late February, with preliminary estimates from Statistics Canada suggesting a minimal 0.1% growth.
