Canada’s economy shrank in October as manufacturing and resource sectors slowed

December 23, 2025

RED FM News Desk

Statistics Canada says Canada’s real gross domestic product fell 0.3 per cent in October, driven largely by a slowdown in the manufacturing sector.

The decline came as goods-producing industries dropped 0.7 per cent during the month, with manufacturing output leading the decrease. Manufacturing production fell 1.5 per cent in October, the agency reported.

The mining, quarrying, and oil and gas extraction sector also contracted, shrinking by 0.6 per cent and more than reversing gains recorded in September. Statistics Canada noted that maintenance work at oilsands facilities contributed to the pullback.

“The Canadian economy was starting to struggle again early in the fourth quarter,” CIBC senior economist Andrew Grantham wrote in a note Tuesday.

Construction activity also declined for the first time in six months, with engineering and other construction projects accounting for most of the decrease.

Public sector activity weakened as well, partly due to Alberta’s provincewide teachers’ strike, which lasted more than three weeks and weighed on education-related output. As a result, the broader public sector category fell 0.3 per cent in October.

Looking ahead, Statistics Canada’s advance estimate for November points to a modest 0.1 per cent increase in GDP, supported by higher activity in the education, construction and transportation sectors.