Canada’s real gross domestic product (GDP) contracted by 0.2% in November 2024, marking the largest monthly decline since December 2023. This downturn follows a 0.3% increase in October and was driven by widespread declines across multiple sectors, with 13 out of 20 industries reporting contraction, according to Statistics Canada in a report released Friday.
Goods-Producing Industries Decline by 0.6%
The goods-producing sector saw a 0.6% drop in November, reversing part of October’s 0.9% growth. Mining, quarrying, and oil and gas extraction led the decline, falling 1.6% after a strong October performance. Oil and gas extraction decreased 1.5%, with oil sands extraction plunging 3.4%—the largest contraction since May 2024. Support activities for mining and oil and gas extraction recorded an even steeper decline of 4.6%, the most significant drop since December 2022.
The utilities sector also suffered a sharp 3.6% decrease, primarily due to a 4.4% decline in electric power generation, transmission, and distribution. Milder-than-usual November temperatures in central and eastern Canada reduced heating demand, while drought conditions affected electricity supply.
Services Sector Contracts for First Time in Six Months
After five consecutive months of growth, services-producing industries edged down by 0.1% in November. The transportation and warehousing sector was the largest contributor to the decline, shrinking 1.3%—its biggest drop since December 2022. This was largely attributed to labor disruptions in the postal service (-20.3%), rail transportation (-3.0%), and water transportation (-4.6%).
Major work stoppages at the Port of Montréal and the Port of Vancouver further disrupted cargo movement, leading to declines in support activities for transportation (-0.9%) and truck transportation (-0.8%).
Statistics Canada
Real Estate and Construction Sectors Show Strength
Amid economic contraction, the real estate and rental and leasing sector continued its upward trend, growing 0.3% in November—its seventh consecutive monthly increase. This growth was fueled by a 3.4% rise in real estate agent and broker activity, supported by higher home sales in Ontario, Quebec, and British Columbia.
The construction sector also performed well, expanding by 0.7%. Residential building construction rose 1.8%, driven by increased activity in single-family home construction and renovations. Non-residential construction climbed 1.3%, bolstered by industrial and public building projects.
Leisure Industries See Boost from Taylor Swift’s Eras Tour
Despite overall economic weakness, several leisure-related industries experienced growth, coinciding with Taylor Swift’s Eras Tour arriving in Toronto. The accommodation and food services sector increased 1.4%, marking its largest gain since January 2023. Arts, entertainment, and recreation also grew by 0.8%, although lower-than-usual NHL attendance tempered the gains.
Air transportation continued its recovery, rising 1.3% in November, driven by increased domestic and U.S. cross-border travel.
December GDP Forecast and Year-End Outlook
Preliminary data suggests that GDP rebounded slightly in December, with an estimated 0.2% increase. Growth in retail trade, manufacturing, and construction is expected to offset continued weakness in transportation, warehousing, and real estate.
For Q4 2024, GDP is projected to have grown by 0.4%, bringing total economic growth for the year to 1.4%. Official figures will be released on February 28, 2025.
Conclusion
Canada’s economy faced a significant contraction in November, with broad-based declines across key industries. While growth in real estate, construction, and leisure sectors provided some resilience, the impact of labor disruptions and weaker energy output weighed heavily on overall economic activity. Looking ahead, December’s preliminary rebound offers some optimism, but challenges remain as the country navigates economic headwinds into 2025.
Source: Statistics Canada
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024 and 2025.
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