Canada's GDP fell 0.2% in November as mining, transportation, and utilities posted sharp declines
Statistics Canada revealed that real gross domestic product (GDP) declined 0.2 percent in November, marking the largest monthly contraction since December 2023.
This followed a 0.3 percent increase in October, with broad-based declines as 13 of 20 sectors contracted.
Goods-producing industries fell 0.6 percent in November, partially offsetting a 0.9 percent increase in October. Mining, quarrying, and oil and gas extraction, along with utilities, were the primary drivers of the decline.
Services-producing industries edged down 0.1 percent after five consecutive months of growth.
The transportation and warehousing sector was the largest contributor to the decline, largely due to work stoppages. However, real estate and rental and leasing posted gains that tempered the overall contraction in services.
Mining, quarrying, and oil and gas extraction declined 1.6 percent, reversing a 2.2 percent gain in October. Oil and gas extraction dropped 1.5 percent, with oil sands extraction falling 3.4 percent.
This was the largest monthly decline since May 2024, driven by lower synthetic crude production and crude bitumen extraction in Alberta.
Support activities for mining and oil and gas extraction fell 4.6 percent, the steepest drop since December 2022, reflecting declines across all supporting activities.
Mining and quarrying, excluding oil and gas, declined 0.5 percent, with coal mining falling 5.3 percent and metal ore mining down 0.6 percent. Copper, nickel, lead, and zinc ore mining recorded a 4.9 percent drop, largely due to production delays at a copper mine in British Columbia.
In contrast, oil and gas extraction, excluding oil sands, rose 0.4 percent due to increased natural gas extraction.
The utilities sector contracted 3.6 percent, mainly due to a 4.4 percent drop in electric power generation, transmission, and distribution.
A milder-than-usual November in parts of central and eastern Canada reduced heating demand, while low precipitation and worsening drought conditions affected electricity supply.
The transportation and warehousing sector declined 1.3 percent, the largest monthly drop since December 2022, when severe weather disrupted operations.
The postal service subsector fell 20.3 percent in November, following a strike by approximately 55,000 postal workers on November 15, which disrupted letter and small parcel deliveries ahead of the holiday shopping season.
Rail transportation declined 3.0 percent, and water transportation dropped 4.6 percent, both impacted by labour disputes.
The Port of Montréal saw ongoing disruptions from October into November, culminating in a lockout of nearly all employees by the Maritime Employers Association on November 10, which halted operations at most terminals.
On the West Coast, the British Columbia Maritime Employers Association locked out forepersons at all member terminals at the Port of Vancouver on November 4. Activities resumed after the Canada Industrial Relations Board ruled for binding arbitration on November 12.
Support activities for transportation declined 0.9 percent, while truck transportation fell 0.8 percent, both affected by lower cargo movements in and out of Canadian ports.
Despite the overall decline in GDP, real estate and rental and leasing increased 0.3 percent in November, marking the seventh consecutive month of growth.
Activity at real estate agents’ and brokers’ offices rose 3.4 percent, driven by increased home sales in Ontario, Quebec, and British Columbia. Legal services, closely tied to real estate transactions, rose 0.4 percent.
The construction sector expanded 0.7 percent, continuing an upward trend since August. Residential building construction rose 1.8 percent, reflecting growth in single-family home construction and home improvements.
Non-residential building construction increased 1.3 percent, driven by gains in industrial and public building projects.
Several leisure-related industries posted gains in November, coinciding with the arrival of Taylor Swift’s Eras Tour in Toronto. The accommodation and food services sector grew 1.4 percent, the strongest increase since January 2023.
Food services and drinking places rose 1.1 percent, with activity increasing across all service establishments. Accommodation services saw a 2.4 percent gain, driven by higher demand for traveller accommodations.
The arts, entertainment, and recreation sector grew 0.8 percent, with all three subsectors contributing to the increase. However, performing arts, spectator sports, and related industries saw limited growth due to lower-than-usual National Hockey League attendance in November.
Air transportation increased 1.3 percent for the second consecutive month, supported by higher domestic and transborder travel. A rise in United States residents entering Canada by air contributed to the sector’s growth.
Statistics Canada’s advance estimate for December indicates that real GDP increased 0.2 percent, with gains in retail trade, manufacturing, and construction partially offset by declines in transportation and warehousing, real estate and rental and leasing, and wholesale trade.
With this preliminary estimate, real GDP by industry is expected to have grown 0.4 percent in the fourth quarter of 2024 and 1.4 percent for the full year. Official GDP data for the fourth quarter and 2024 will be released on February 28.
Source: Statistics Canada
