StatCan Reports Potential Q4 Contraction as November Economy Stalls

Statistics Canada has issued a report highlighting a stall in the Canadian economy during November. The early estimates indicate a potential decline in real gross domestic product (GDP) for the fourth quarter of 2025. The agency noted that real GDP growth was flat in November, recovering slightly from a 0.3 percent decrease observed in October.

Key Economic Trends in November

The fluctuating economic landscape reflected a decline in goods-producing industries while services saw expansion. Notably, manufacturing experienced a 1.3 percent drop, largely due to a global semiconductor shortage impacting motor vehicle production at a primary auto plant.

Manufacturing and Trade Insights

• Manufacturing of durable goods reached its lowest point since 2011, excluding periods during the COVID-19 pandemic.
• The wholesale trade sector contracted by 2.1 percent, primarily affected by declines in automotive output.
• Other sectors, including agriculture and forestry, also reported contractions during the same month.

Conversely, retail trade showed resilience, expanding by 1.3 percent. This growth offset previous declines as various sectors rebounded following the conclusion of strikes at Canada Post, Alberta schools, and British Columbia liquor stores.

Future Projections

According to flash estimates from StatCan, real GDP likely increased by 0.1 percent in December, indicating recovery in the manufacturing and wholesale sectors. However, if next month’s GDP report confirms these figures, the economy could face a contraction of 0.5 percent on an annualized basis for the final quarter of 2025. This marks a stark contrast from the 2.6 percent growth observed in the third quarter.

Expert Insights and Predictions

Doug Porter, BMO’s chief economist, noted the trends suggest the economy struggled to gain momentum in Q4. He forecasts that growth may not exceed 1 percent in 2026 due to lingering uncertainties surrounding trade policies.

The Bank of Canada expects overall growth to remain flat in the fourth quarter, aiming for modest recovery in 2026. It has kept its benchmark interest rate steady at 2.25 percent for a second consecutive decision.

Economists like CIBC’s Andrew Grantham believe that while the current GDP figures are unlikely to prompt immediate interest rate cuts, maintaining current rates is essential for fostering recovery. He emphasized the importance of keeping rates at stimulative levels amid ongoing economic uncertainties.

This report detailing the Canadian economy was first published by Filmogaz.com on January 30, 2026.