Canada GDP for October -0.3% vs -0.2% anticipated

Manufacturing & Industrial Activity

• Manufacturing Sector: Fell 1.5%, wiping out September’s gains.

  • Durable Goods (-2.3%): Dragged down by machinery and wood products.

  • Lumber Impact: Wood product manufacturing fell 7.3%, the largest drop since 2020, following new US tariffs on Canadian lumber effective October 14.

• Mining & Energy: Contracted 0.6%.

  • Oil & Gas (-1.2%): Lower crude bitumen extraction due to facility maintenance.

  • Potash Rebound: Rebounded 4.5% after a shutdown in September, slightly tempering the sector’s decline.

Labor Disruptions & Public Sector

• Education: Fell 1.8% due to a province-wide teachers’ strike in Alberta (Oct 6–29), causing the largest subsector drop since late 2023.

• Postal Services: Plunged 32.1% as nation-wide strikes by Canada Post workers (CUPW) shifted to rotating actions on October 11.

• Retail Trade: Declined 0.6%, partly affected by a liquor store strike in British Columbia which hit beer, wine, and liquor retailers.

Trade & Construction

• Wholesale Trade: Contracted 0.9%, driven by miscellaneous merchant and machinery wholesalers.

• Construction: Decreased 0.4%, its first decline in six months.

  • Residential: Down for the third straight month due to a slowdown in new single-occupancy home construction.

  • Non-Residential: Tepid growth of 0.1% was the only bright spot in the sector.

The Resilience in Finance

• Record Highs: The Finance and Insurance sector rose 0.4%, marking its fifth consecutive monthly increase.

• Market Activity: Growth was driven by increased activity in both equity and debt markets.

Early Look: November 2025

• Advance Estimate: Early data points to a slight recovery with a 0.1% increase in real GDP for November.

• Drivers: Expected growth in education (recovery from strike), construction, and transportation, though mining and manufacturing are expected to remain weak.

October was a “perfect storm” (in a negative way) for the Canadian economy, with GDP contracting 0.3% as a wave of labor unrest and new trade barriers stifled growth. The decline was largely driven by a 1.5% slump in manufacturing, triggered significantly by a 7.3% plunge in wood products following new U.S. lumber tariffs. Domestically, widespread strikes—including Alberta teachers, B.C. liquor distribution workers, and a 32% collapse in postal services due to Canada Post walkouts—paralyzed key service sectors. While a record high in the finance sector and early signs of a 0.1% November rebound offer some optimism, the data reinforces a cautious “wait-and-see” approach for the Bank of Canada as it weighs temporary domestic disruptions against intensifying geopolitical trade risks.

The good news is the growth is rebounding modestly in November.