Canada: Economy flatlines in November; small expansion expected in December
GDP reading: GDP flatlined in seasonally adjusted month-on-month terms in November, following a 0.3% drop in the prior month and below market expectations.
Drivers: Manufacturing and agriculture, forestry, fishing and hunting contracted during the month, offsetting gains in retail trade, educational services, and transportation. In particular, education and transportation benefited from the resumption of activity after strike action in October.
GDP outlook: Preliminary estimates suggest real GDP rose 0.1% in December, as gains in manufacturing and wholesale trade were partly offset by declines in mining, quarrying, and oil and gas extraction. This suggests that over Q4 as a whole the economy could have shrunk slightly from Q3.
Panelist insight: On the data and outlook, TD Economics’ Marc Ercolao said:
“Canada’s economy cruised into year-end at stall speed. With November’s print and flash estimates for December, economic growth is tracking a mild contraction for Q4-2025. Quarterly growth over 2025 has been particularly volatile due to sharp movements in trade and inventories, something not well captured in the monthly industry GDP accounts. Accounting for recent discrepancies between the two measures, we expect GDP growth in Q4 to land roughly flat, in line with the Bank of Canada’s (BoC) recent projections.”