Statistics Canada reported that Canada’s real gross domestic product was essentially flat in August, marking a second month of economic stagnation that fell short of earlier forecasts for a 0.2% growth rate. The preliminary estimate for September points to a monthly contraction of 0.1%.
Economists and Statistics Canada anticipated a 0.2% expansion, but real gross domestic product remained flat for the second month in a row in August , according to Statistics Canada.
Manufacturing and Resource Sectors Drive September Downturn
Statistics Canada provided a preliminary estimate showing that monthly GDP dropped 0.1% for September, driven primarily by downturns in the manufacturing sector as well as mining and oil and gas extraction.
Wholesale trade fell 1.4% with widespread contractions across subsectors, while automobile and parts wholesalers recorded their first drop in seven months due to softer manufacturing activity and a reduction in vehicle imports. Public administration shrank as preparations for the 2026 census neared completion, oil and gas extraction dropped as facility maintenance in northern Alberta’s oil sands weighed heavily on the mining industry, and scheduled maintenance outages at nuclear power plants in Ontario and New Brunswick dragged down utilities.
Retail Growth Offsets Slowing Third Quarter Output
Retail trade offered a bright spot by surging 1.2% and wiping out the losses seen in July, while manufacturing notched its fifth expansion in seven months alongside gains in transportation and warehousing as well as finance and insurance.
Statistics Canada’s quick estimate projects a 1.3% annualized real GDP growth rate for the third quarter, down from 3.3% in the second quarter. Just two days before the release, the Bank of Canada raised its benchmark interest rate by a quarter-percentage point to 2.5%—its first hike in over three years—while projecting a higher 2% annualized growth rate for the third quarter.
