Canada’s real gross domestic product declined by 0.3 percent in October 2025, the largest single-month downturn since late 2022, according to official figures released Tuesday, Dec. 23 by Statistics Canada. The contraction followed a 0.2 percent rise in September and reflected widespread softness across multiple sectors of the economy.

The goods-producing segment of the economy fell 0.7 percent, led by persistent weakness in manufacturing, while services-producing industries slid 0.2 percent amid labour disruptions and softer consumer-related activity. In particular, the mining, quarrying, and oil and gas extraction sector contracted 0.6 percent in October, driven by a 1.2 percent decline in oil and gas extraction as several operators conducted scheduled maintenance on key facilities.

Construction activity also weakened, with the sector’s output decreasing 0.4 percent, its first decline after five months of gains. Engineering and other construction activities accounted for the largest share of that drop, while residential building construction posted its third consecutive monthly decrease.

Manufacturing continued to drag on overall growth, contracting 1.5 percent. Durable-goods manufacturers saw a 2.3 percent fall, with machinery output down 6.9 percent and wood product manufacturing down 7.3 percent — the latter reflecting external trade pressures, including newly imposed tariffs by the United States.

Labour actions in the public sector, including a prolonged teachers’ strike in Alberta as well as the Canada Post strike, contributed to declines in educational services and broader services activity, compounding the downturn.

Analysts note that the October contraction underscores the fragility of growth in the fourth quarter of 2025 and complicates the outlook for monetary policy. The Bank of Canada has maintained its key policy rate at 2.25 percent this month, with markets adjusting expectations for future adjustments in response to the sobering data.