The retail trade sector expanded 1.3% in November, as all subsectors grew in the month. This increase more than offset the back-to-back monthly declines in the two preceding months, reported Statistics Canada on Friday.
Food and beverage retailers (+2.5%) rebounded in November, reflecting higher beer, wine and liquor retailing activity, following the conclusion of a work action in British Columbia on October 26 that had disrupted activity since September 2, said the federal agency.
The wholesale trade sector contracted 2.1% in November, the largest contraction since April 2025. Contractions in motor vehicle and motor vehicle parts and accessories wholesaling and building material and supplies wholesaling drove the decline in November.
In November, motor vehicle and motor vehicle parts and accessories merchant wholesalers dropped 12.6%, reflecting lower activity in both the motor vehicle and used motor vehicle parts and accessories industry groups, coinciding with disrupted motor vehicle production activity due to the global semiconductor shortage.
The federal agency said real gross domestic product (GDP) overall in Canada was essentially unchanged in November, following a 0.3% decline in October, as contractions in goods-producing industries offset expansions in services-producing industries.
“Goods-producing industries declined 0.3% in November, down for the third time in four months, driven by contractions in the manufacturing and agriculture, forestry, fishing and hunting sectors in the month. Services-producing industries edged up 0.1%, with expansions in the retail trade, educational services and transportation and warehousing sectors. Overall, 10 of the 20 industrial sectors grew in November,” it said.
“Advance information indicates that real GDP increased 0.1% in December. Increases in manufacturing and wholesale trade were partially offset by decreases in mining, quarrying, and oil and gas extraction. Owing to its preliminary nature, this estimate will be updated on February 27, 2026, with the release of the official GDP by industry data for December 2025,” noted Statistics Canada.
“With this advance estimate for December, information on real GDP by industry suggests that the economy decreased 0.1% in the fourth quarter and increased 1.3% in 2025. The official estimates for the fourth quarter and the year will be available on February 27, 2026, when the official estimate of GDP by income and expenditure is released.”
Andrew Grantham, Senior Economist, CIBC Capital Markets, said the Canadian economy was still struggling for growth towards the end of the fourth quarter, with November GDP showing a flat reading and the advance estimate for December pointing to only marginal growth.
“The flat reading for November was slightly weaker than the advance and consensus estimate (+0.1%) but not a huge surprise given subsequent industry data showing weakness in the wholesaling sector. Manufacturing also weighed on activity during the month, and combined with the decline in wholesaling offset rebounds in areas such as education and transportation that were negatively impacted by strike activity in the prior month. The advance estimate for December pointed to a 0.1% increase in activity, with StatsCan suggesting that this was driven by at least partial recoveries in manufacturing and wholesaling,” he said.
“Today’s report leaves Q4 GDP showing a slight contraction of 0.5% annualized, which is a little weaker than the Bank’s recent MPR projection but not overly concerningly given the typical degree of divergence between the industry data and next months expenditure figures. That said the still sluggish momentum towards quarter end may be a concern, as monthly growth rates will need to accelerate for the economy to achieve the Bank’s near 2% MPR forecast for Q1. Overall today’s data are unlikely weak enough to revive talks for further interest rate cuts by the Bank, but it is clear that rates will need to be held at stimulative levels for a while to drive a recovery amid the continued uncertain economic environment.”
Douglas Porter, Chief Economist, BMO Capital Markets, said: “Today’s results reinforce the theme that the economy struggled to grow at all in Q4 after a surprisingly perky Q3. And with the preliminary estimate of modest gains in December, the overall economy will have scratched out a GDP advance of only about 0.5% in the past 12 months. Average annual growth will come in about a percentage point above that modest pace, thanks to its solid momentum heading into the trade war a year ago. But for 2026, the economy will do well to post growth of much more than 1% this year, with the sluggish hand-off from 2025 as well as the lingering cloud of uncertainty on the trade front. These results are not markedly different from the Bank’s views earlier this week, but the soft undertones will keep them “prepared to respond”.“
Marc Ercolao, Economist, TD Economics, 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.
“The BoC doesn’t make its next policy decision until March 18th. We don’t think today’s data moves them off of their current policy stance even as they acknowledge that considerable uncertainty around trade and overall economic growth is still present. All told, we maintain our view that the BoC has reached the end of their interest rate easing cycle.”
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